Khalifa issues law regulating financial system of Abu Dhabi Government

ABU DHABI, President His Highness Sheikh Khalifa bin Zayed Al Nahyan, in his capacity as Ruler of Abu Dhabi, has issued a law concerning the Abu Dhabi Government’s financial system.

The law seeks to set a comprehensive regulatory framework for public financial resources to guarantee that government work is conducted within the institutional framework, with a high level of transparency and accountability in the management of public funds.

The law assigns the Department of Finance the responsibility of designing and executing a comprehensive financial system with high economic effectiveness and efficiency. The department prepares the Government’s financial policy and submits it to the Executive Council for approval.

The law covers budgeting and implementation of the budget, treasury management, regulating the bank accounts of the Government, public entities, institutions and companies, regulating and managing public debt and government bonds, preparing and issuing a financial monitoring system after approval from the Executive Council, issuing a public services pricing guide after approval from the Executive Council, and examining pricing requests from public entities.

It also requires preparing an ownership policy for government institutions and companies, to be approved by the Executive Council, issuing rules and templates for their expected performance statements, and monitoring their financial performance and other government investments.

Furthermore, the law forbids imposing, amending or removing any taxes, unless through legislation, and prohibits exempting all from these taxes, except in the cases stated in the law. No fees may be imposed, amended or removed unless through legislation, Emiri Decree or Executive Council Resolution.

The law has removed all tax and fee exemptions, including exemptions from customs fees that benefit government entities, institutions and companies, affiliated companies, or any other entity, by virtue of a legislation or resolution enforced before this law came into force.

An exception is made for institutions, companies and individuals working in free zones, and for entities the Executive Council decides to fully or partially exempt from fees and taxes for charitable, humanitarian, educational, cultural or other reasons. These provisions remain in line with the federal laws and international agreements.

According to this law, the Department of Finance shall prepare a Government Services Pricing Guide, to be considered as a reference for setting the prices of services provided by government entities. It is based on fair costs, benefit considerations, and market prices.

The law further obliges every government entity, institution and company to prepare and issue semi-annual financial statements no later than 30 days after the middle of the fiscal year, and to issue audited annual financial statements no later than 90 days after the end of each fiscal year. A copy of these statements must be sent to the Department of Finance.

The Department of Finance is also tasked with organising government procurement and tenders by establishing regulatory and operational frameworks, and issuing regulations and systems to implement them, after their approval by the Executive Council.

It shall further develop and operate an IT platform for government procurement (procurement portal) to be used to register suppliers and electronically analyse spending, contracting and procurement for centralised and non-centralised contracts. Government entities must commit to use the portal for their purchases, especially for goods and services to be purchased through centralised contracts, and to sign these contracts with suppliers.

Source: Emirates News Agency