Press briefing of Cabinet Decision taken on 2023-05-08

Introducing a new Fiscal Management Act

- The fiscal operations are governed under the Fiscal Management (Responsibility) Act, No.3 of 2003 and subsequent amendments to the Act. Although the act has made provisions for not being complied with the said fiscal rules only with the approval of the parliament under exceptional circumstances, the act does not include the provisions for deviation from the said rules. Also, the action to be taken in case of the targets set as per the provisions of the Act cannot be met, are not specified clearly in the Act. Taking these facts into account, the Government has agreed to enact a new Fiscal Management Act under the International Monetary Fund's Extended Fund Facility arrangement. Accordingly, the proposal made by the Hon. President in his capacity as the Minister of Finance, Economic Stabilization and National Policies, to take necessary action to enact a new Fiscal Management Act enabling to establish a new fiscal rules framework that will be effective with the Budget of year 2025 and simultaneously to repeal the Fiscal Management (Responsibility) Act, No.3 of 2003, was approved by the Cabinet.