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February 19, 2023 | 2 years ago

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2023 Finance Act and Local Finance: Urgency of a Budget Revolution

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The 2023 budget law, drafted in accordance with the rules of the Organic Law of the Finance Act of September 2018, is undoubtedly a major step forward in the budgetary management of public finances. This law introduces the concept of performance and thus introduces a new format in public financial management that is now based on paradigms of objectives and results measured by a set of indicators. This contribution, which summarizes the main innovations of the new budget culture, poses the legitimate hypothesis of its adaptation to local finances.

…The assessment of the wilaya's share in gross domestic product (GDP) as an indicator of performance would thus be the precursor to this unavoidable extension.

The 2023 Finance Law was the subject of a Medium-Term Fiscal Framework which determined, over a three-year period, the revenue and expenditure forecast based on the outlook for the international environment and the behaviour of the domestic economy. The appropriations are now presented by program and broken down into actions which define a public policy whose implementation is evaluated on the basis of performance indicators. They must be fully and responsibly justified every year. The State's accounts, traditionally based on the cash principle, are also kept on the basis of established entitlements. A major fact is that the State also implements cost analysis accounting. On the other hand, the accounts are now subject to certification by the Court of Auditors, which attests to their sincerity, which must faithfully reflect the financial situation of the State. Apart from these fundamental changes, the new budget law is characterized by a presentation that promotes readability and parliamentary understanding. In short, a fiscal revolution that would have a knock-on effect on local governments and the way they govern. For changes to the accounting and budgetary information system, indicators to measure local performance and the extent of external controls have been introduced.

February 19, 2023 | algeria-logo

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