Understanding Budgeting: Congress, Presidential Veto & More
Understanding Key Budgeting Concepts
The National Congress, according to common law, can add or correct bills if they relate to the project’s core ideas, following appropriate procedures. Article 62 of the Constitution limits Parliament to accepting, reducing, or refusing services, jobs, salaries, loans, benefits, expenses, and other initiatives proposed by the President.
Presidential Veto on Budget Bills
A Presidential veto is the President’s disapproval of a bill, preventing its enactment. This veto suspends the law, returning the bill to its origin chamber for reconsideration. The President has thirty days to veto a bill.
Budget Classification
A budget classifier is a permanent structure, defined annually by the Ministry of Finance, applicable to all utilities and municipalities. It defines and classifies all annual income and expenditure, providing information for decision-making and linking the budget process with public sector planning. These classifications allow for inspection of public resource management efficiency at national, regional, and local levels.
Levels of Budget Execution
Budget execution involves accounting levels ranging from general to specific: heading, group, subgroup, account, sub-sub, and analytical.
SII Taxes
SII (Internal Revenue Service) accounts for the inspection, interpretation, and application of tax legislation, except for taxes charged by municipalities.
Importance of Budget Classification in Public Spending
Budgetary classifications provide information for decision-making and link the budget process with public sector planning. They also allow control over the efficiency of public resource management at national, regional, and local levels.
Budgetary Flexibility
Flexible budgetary rules can only be amended by supreme decree. Budget changes, applying budgetary flexibility rules, are estimates financed at the executive’s discretion, including income and expenditure.
Payments Exceeding Budgeted Amounts
The President can order payments exceeding budgeted amounts for compliance, back taxes, fees, public debt service, pension payments, and social welfare expenses.
Multiannual Expenditure
Multiannual expenditure is the allocation of a charge paid over multiple budget periods. Generally, the entire expenditure allocation occurs within the budget period when the expenditure is committed. These are expenses performed over the budget period’s validity.
Role of the Treasury
The Treasury collects taxes and other fiscal revenues, administering the collection and judicial court of taxes, including tax credits legally considered taxes.