The Cabinet of Ministers approved, the proposal presented by the President in his capacity as the Minister of Finance, Economic Stabilization & National Policies to take the necessary steps to introduce a new State Financial Management Act to be implemented with the 2025 budget, and simultaneously to repeal the Financial Management (Responsibility) Act No. 3 of 2003.
State financial operations are governed by the Financial Management (Responsibility) Act No. 3 of 2003 and subsequent amendments to that Act. The Act provides for non-compliance with the State’s financial rules only with the approval of Parliament in extraordinary cases. However, the Act does not include provisions for deviating from those terms.
The Act does not specify the measures to be taken in the event that the set goals cannot be met in accordance with the provisions of the Act. Taking those facts into account, the government has agreed to enact a new Public Finance Management Act under the International Monetary Fund’s Extended Credit Facility programme.