Finance Ministry: Controlling expenditures, rationalizing spending, and boosting revenues... without compromising performance
The Ministry of Finance has directed all government entities, when preparing their new budget drafts, to estimate the budget for the fiscal year 2027/2028 within the limits to be determined for the expenditure ceiling of each entity, in accordance with the regulations and instructions to be issued by the Ministry. It stressed the necessity of adhering to the policy of expenditure compression, rationalizing spending, and increasing revenues without compromising performance.
In Circular No. 1 of 2026, which Al-Anbaa obtained a copy of, the Ministry emphasized that government entities must compress and rationalize spending as much as possible and strive to achieve a balance between the services provided to citizens and the rationalization of expenditures required to deliver these services, through the optimal use of available financial and human resources.
The Ministry called on all government entities to comply with the policies, procedures, and provisions stipulated in Circular No. 3 of 2022 regarding the systems and policies for non-financial non-current assets, as well as inventory and valuation procedures, to ensure the sustainability and efficient management of assets. This aims to maximize benefits by maintaining strict control over all owned assets, including their recognition, recording, preservation, and security, and by employing a methodical approach to fulfilling asset needs for performing their duties through effective planning.
The Ministry authorized all government entities, upon approval from the Ministry of Finance’s General Budget Affairs, to initiate the tendering process for new proposals included in their budget drafts for the fiscal year 2027/2028 submitted to the Council of Ministers. However, contract awards and signing are permitted only after the enactment of the law linking the budget for the fiscal year 2027/2028. Exceptions apply to periodic supply contracts, usage, service, maintenance, and lease contracts, as regulated by Article 26 of Law-Decree No. 31 of 1978.
The Ministry requested that new appropriations not be included for line items and categories that were estimated in the previous three years but remained unspent or had low expenditure rates, unless the reasons for non-spending in previous years and any new circumstances necessitating new appropriations for the current fiscal year are presented to the Ministry of Finance. Furthermore, government entities must ensure that the ceilings for estimates of current expenditures and capital expenditures in their budget drafts for the fiscal year 2027/2028 align with the limits determined for each entity’s budget ceiling according to the Ministry’s regulations and instructions. Additionally, their budgets for the fiscal years 2028/2029 and 2029/2030 (indicative budgets) must not exceed the estimates allocated for the fiscal year 2027/2028 as the upper ceiling.
In its circular, the Ministry stated that, based on Council of Ministers Decision No. 332 issued at its meeting No. 9/2017 held on March 1, 2017, the Ministry of Finance was tasked with taking necessary measures to ensure the success of the methodology for setting spending ceilings in the General State Budget draft and to initiate medium-term planning. This aims to ensure the optimal allocation of available financial resources according to priorities, achieve economic, social, and security objectives, and improve the level of public services provided by government entities to citizens.
Furthermore, based on Council of Ministers Decision No. 912 at its meeting No. 26/2025 held on July 8, 2025, the Ministry of Finance was directed to determine ceilings for total expenditures in the budgets of ministries and government departments for the next three years. Government entities were instructed to adhere to the ceiling determined by the Ministry when entering their respective amounts into the GFMIS system. If the existing ceiling is exceeded, the concerned entity must discuss the reasons for the excess with the Ministry of Finance after submitting the budget draft for the fiscal year 2027/2028 according to the ceiling set by the Ministry.
In preparing the budget draft for the fiscal year 2027/2028, the following considerations must be taken into account:
A. Rationalizing spending and controlling expenditures without compromising the services provided by the entity, in accordance with Council of Ministers Decisions No. 51 of 2014 and No. 728 of 2020. All government entities must coordinate efforts and regulate and specify expenditure categories.
B. Estimating the number of new hires for the entity and adhering to this estimate during budget implementation.
C. Prioritizing construction projects and contracts when preparing the budget draft.
D. Reviewing fees for provided services and increasing their values to correspond with their worth, in compliance with Law-Decree No. 1 of 2025 concerning fees and financial costs for utilizing public facilities and services.
E. Enhancing the efficiency of collecting government revenues and recovering debts owed to the government.
Classification of Development Plan Projects
The Ministry of Finance, in a circular, stipulated that for the 2027/2028 annual plan projects, each entity must determine the functional classification of every development plan project (whether developmental or construction-related). This must be done after coordination with the General Secretariat of the Supreme Council for Planning and Development and obtaining approval from the Ministry of Finance’s General Budget Affairs department regarding the project’s functional classification. Furthermore, entities must ensure that the development plan project forms include the project’s functional classification.
Priority of the Industrial Strategy
The Ministry of Finance emphasized that all entities participating in projects listed in the Kuwait National Industrial Strategy 2035 must monitor the implementation of these projects and their associated data or execution budgets, granting them priority status.
