Ministry of Finance unveils new initiatives to bolster Oman’s fiscal performance
Published: 02:01 PM,Jan 03,2023 | EDITED : 06:01 PM,Jan 03,2023
The Ministry of Finance (MoF) has unveiled a wide set of projects to improve the fiscal performance of the Omani economy in 2023.
Most notable is the establishment of a wholly-state owned gas company, Integrated Gas Company (IGC), which will contribute to an estimated RO 1.400 billion to the 2023 budget revenues. The company, under the supervision of MoF, will improve the fiscal performance by removing gas purchase and transportation expenses from the State Budget, in addition to transferring net gas revenue to the treasury.
Additionally, this year’s budget introduced a new item: a social security net subsidy. An amount of RO 384 million has been allocated towards the Social Protection System established in accordance with Royal Decree 33/2021. The system aims to establish an integrated and comprehensive social protection system to ensure fiscal sustainability.
The system will include various schemes such as social welfare schemes, retirement benefits, social security. However, most notably the system will aim to integrate various pension funds. The project is currently under review by legislative authorities, and a Social Protection Law is expected to be issued.
Moreover, government service fees are estimated to generate a revenue of RO 1.330 billion in 2023. The Ministry of Finance introduced the Government Services Pricing initiative earlier in an effort to streamline government services, reduce the number procedures and eliminate repeat payments. Based on the Fee Setting Policy Handbook issued by the Ministry, 845 fees were reduced, cancelled or merged in 2022. Seven government institutions have already adopted the system, with five more expected to do so by 2023.
Furthermore, in light of issues facing global supply chains, the Supply Chain Financing Scheme (SCF) has been introduced by the Ministry to ensure the sustainability of the supply chain. The scheme, currently under development, will expedite payment to government contractors and suppliers with accounts payable worth RO 100,000 or more.
In addition, the Public Debt Law is set to be introduced to manage the government's public debt, obtained from banks, financial institutions, or individuals .The law will aim to regulate and manage public debt operations, flow management mechanisms, diversify funding sources, monitor indebtedness and associated risks, and improve cash flow. Additionally, the Financial Law Executive Bylaws are currently under revision to address recent changes and meet current and future initiatives.
The MoF will also introduced “Program Based Budget (PBB)” in 2023, a fiscal planning approach that is expected to provide an accurate data base for monitoring and tracking government performance and linking financial planning to public policies. The program aims to integrate efforts and avoid duplication and 29 government entities are expected to participate in the system this year.
Lastly, the MOF will allow members of the community to participate in the conversation. The e-platform Tafakur will allow individuals to share ideas, suggestions and solutions regarding fiscal sustainability, as well as public financial management.
Most notable is the establishment of a wholly-state owned gas company, Integrated Gas Company (IGC), which will contribute to an estimated RO 1.400 billion to the 2023 budget revenues. The company, under the supervision of MoF, will improve the fiscal performance by removing gas purchase and transportation expenses from the State Budget, in addition to transferring net gas revenue to the treasury.
Additionally, this year’s budget introduced a new item: a social security net subsidy. An amount of RO 384 million has been allocated towards the Social Protection System established in accordance with Royal Decree 33/2021. The system aims to establish an integrated and comprehensive social protection system to ensure fiscal sustainability.
The system will include various schemes such as social welfare schemes, retirement benefits, social security. However, most notably the system will aim to integrate various pension funds. The project is currently under review by legislative authorities, and a Social Protection Law is expected to be issued.
Moreover, government service fees are estimated to generate a revenue of RO 1.330 billion in 2023. The Ministry of Finance introduced the Government Services Pricing initiative earlier in an effort to streamline government services, reduce the number procedures and eliminate repeat payments. Based on the Fee Setting Policy Handbook issued by the Ministry, 845 fees were reduced, cancelled or merged in 2022. Seven government institutions have already adopted the system, with five more expected to do so by 2023.
Furthermore, in light of issues facing global supply chains, the Supply Chain Financing Scheme (SCF) has been introduced by the Ministry to ensure the sustainability of the supply chain. The scheme, currently under development, will expedite payment to government contractors and suppliers with accounts payable worth RO 100,000 or more.
In addition, the Public Debt Law is set to be introduced to manage the government's public debt, obtained from banks, financial institutions, or individuals .The law will aim to regulate and manage public debt operations, flow management mechanisms, diversify funding sources, monitor indebtedness and associated risks, and improve cash flow. Additionally, the Financial Law Executive Bylaws are currently under revision to address recent changes and meet current and future initiatives.
The MoF will also introduced “Program Based Budget (PBB)” in 2023, a fiscal planning approach that is expected to provide an accurate data base for monitoring and tracking government performance and linking financial planning to public policies. The program aims to integrate efforts and avoid duplication and 29 government entities are expected to participate in the system this year.
Lastly, the MOF will allow members of the community to participate in the conversation. The e-platform Tafakur will allow individuals to share ideas, suggestions and solutions regarding fiscal sustainability, as well as public financial management.