Former finance minister: the actual spending need does not exceed 50 percent of the 2020 budget .. The deficit is unrealistic
The former Minister of Finance, Dr. Khaled al-Mahayni pointed out that the estimated deficit in the budget of 2020 amounting to 1455 billion Syrian pounds; is not a realistic deficit, because it will not spend the entire state budget.
He pointed out that we do not need to spend the amount of 4000 billion pounds according to the items of the general budget presented, and may be the actual need does not exceed 40 percent to 50 percent of this figure, according to what is currently spent, because the Ministry of Finance adopted since 2012 the principle of maturity in the preparation of the budget Not the monetary basis adopted in the Basic Financial Law of the State No. 54 of 2006, and the financial regulations of public bodies of an administrative nature issued by Decree No. 488 of 2007 and currently in force in Syria, noting that if the monetary basis was adopted, the 2020 budget would not have reached this size. (4000 billion Lira), because it is a large figure that is not spent according to the above and exceeds the current expenditure needs.
Note that government accounting applied to the accounts of the state budget in most countries currently take the basis of cash or modified cash basis, in line with the nature of government accounting, which differs from the financial accounting applied in companies and profit-making enterprises in order to measure profit at the end of the year, while accounting The government aims to measure the surplus or deficit of the state budget and therefore according to the provisions of the financial regulations of the public bodies of the administrative nature referred to, it is not included in the calculation of the fiscal year only revenues received and expenses paid.
Beyond spreads!
Turning with Dr. Al-Mahayni to the subject of price differences, an expert who served as Minister of Finance for 15 years (1987-2002) and then preparing 15 budgets under his reign, for the first time the mass of oil price differentials is withdrawn from current revenues (included under Miscellaneous revenues) and kept in the account of the company «fuel» as a more economic measure, according to the government financial statement, and the assurances of Finance Minister Mamoun Hamdan before the People's Assembly during the discussion of the draft budget, and these differences amounted to about 1054 billion Syrian pounds, an increase of about 279.3 billion from 2019 Current revenues are estimated at 1430.87 ml Yar Lira in the 2020 budget.
Accordingly, al-Mahayni explained that the price differences are usually due to the difference between the cost of obtaining oil derivatives and the prices of their sale to citizens and other entities in Syria. Note that the insurance of these derivatives is usually through two sources, the first through what is provided from the local production available for crude oil, and refined In the refineries, the price of the locally produced barrel of the refinery is calculated at the international price of crude oil, and the second source through import, which is the largest number currently due to the crisis.
He explained that the price differences were supplied in accordance with the instructions in force to the public treasury on a monthly basis, and are used to cover the burdens of salaries and wages allocated in the public budget, which resources come to the treasury throughout the year, pointing out that the price differences are in fact part of surpluses for companies of a nature For example, the company will achieve an increase in its revenues - as expected this year 2019 - not due to the increase in its operating activity, but as a result of decisions to increase the prices of oil derivatives, and therefore Increases its profit and fo Accordingly, the Ministry of Finance calculates this profit in the item of income differences, and regulates it in the section of miscellaneous income within current revenues, so that it is collected on a monthly basis, especially since price differences constitute an important percentage of Revenues, but not recorded in this way, the profits will appear at the end of the year in the company, and therefore will be transferred to the public treasury according to the principle of Sawafi, and not monthly, noting that this income resulting from price differences is the right of the state in the end, and must be earned by the treasury .
He pointed out that the failure to record price differences in miscellaneous income (within current income) may mean that the Treasury will not receive these revenues on a monthly basis, but will wait until the end of the year, and therefore the description of this measure more economically, means that these revenues are kept in the company, if it turns out According to the Ministry of Finance, there are oil derivatives that are lost, most of which are secured through importation, ie at the international price, so selling them at a lower cost would result in a loss.In contrast, there may be profitable derivatives, since some of them are secured from domestic production, so the idea From leaving revenue differentials At Mahrouqat, the full results of the company may appear in all its products, in accordance with the principle of bearing the loser products, other losing ones, or it may be to mitigate the loss of the company in general.
Al-Mahayni pointed out that the estimation of price differences of 1054 billion pounds in 2020 is about oil derivatives winning, pointing out that there are other winning materials and achieve price differences other than oil derivatives such as iron, wood and cement, are usually withdrawn monthly from the economic companies concerned with the sale of such materials such as « Imran »and« Cement ».
Expectations of increased production
Al-Mahayni pointed out that the expected increase in domestic oil production by 66 thousand barrels per day next year, would ease the import bill, and this may be a major reason for achieving differences in the prices of oil derivatives, given the increase in the share of insured oil from domestic production, which is priced for refineries at the world price. Crude oil, which is also a possibility along with the previous possibilities.
It is worth mentioning that the bill to support oil derivatives decreased by more than 97 percent in the 2020 budget, which contributes to reduce the loss of «fuel», which is stated by the company sources that the
