Ministry of Finance to Government Entities: Cut Expenditures and Boost Revenue and Debt Collection Efficiency
- The Ministry has established guidelines for preparing budget drafts in accordance with a methodology aimed at controlling expenditure.
- Adherence to the budget expenditure ceiling without exceeding it, with project submissions due by September 30.
- Reducing expenses without affecting services and prioritizing construction projects.
- Including annual development plan projects within the budgets of government entities.
- Linking financial appropriations to government priorities and development plans.
- No new financial requests will be accepted after the submission of the budget draft.
- Reviewing and increasing service fees to align with their value.
- Commitment to the Kuwaitization of government jobs, with recruitment permitted only when necessary.
- No financial benefits, allowances, or bonuses unless stipulated by relevant laws or decisions.
- No new positions for non-Kuwaitis will be created except in accordance with approved regulations.
- It is essential not to include commitments unsupported by contracts or approved documents.
As part of ongoing efforts to reform public finances and enhance the efficiency of state resource management, Minister of Finance Dr. Yaqoub Al-Rafai urged government entities to prepare their budget estimates for the fiscal year 2027–2028 within the expenditure ceilings to be determined for each entity, in accordance with the controls and instructions to be issued by the Ministry of Finance. He emphasized the need to consider policies aimed at curbing expenditures, rationalizing spending, and increasing revenues without compromising performance.
A circular issued by the Ministry of Finance on its official website revealed a set of rules and controls for preparing budget drafts using a methodology aimed at controlling expenditure, improving resource allocation efficiency, increasing revenues, and linking financial appropriations to government priorities and development plans.
The Ministry confirmed that the preparation of the upcoming budget is part of a broader initiative to develop the government financial management system. This includes adhering to expenditure ceilings, implementing medium-term financial planning, improving the quality of financial data according to international classifications and standards, enhancing oversight of government expenditures and projects, accelerating digital transformation, and improving public service efficiency.
The Ministry stressed that government entities’ estimates must reflect their actual needs, with detailed justifications provided for financial requests. Expenditure should be linked to priority programs and projects to achieve a balance between maintaining service levels and ensuring the state’s financial sustainability.
The Ministry clarified in the circular that the preparation of the 2027–2028 budget estimates is part of efforts to reform the public finance sector and improve financial performance by developing the structure of the general government budget and updating classifications and sub-classifications in line with international standards.
It was noted that the budget was prepared in accordance with the “Cash Basis” budget symbols and classification manual, aligning with the Government Finance Statistics Manual (GFS 2001), the United Nations Classification of the Functions of Government (COFOG), and International Public Sector Accounting Standards (IPSAS), paving the way for a gradual transition from cash-based to accrual-based accounting.
The circular included several rules governing the preparation of budget drafts. The Ministry mandated that each government entity form a committee to prepare the 2027–2028 budget estimates, comprising a representative from the Ministry of Finance (General Budget Affairs). The committee’s formation decision must be submitted within one week of the circular’s issuance, and the committee’s work will continue until the budget draft is submitted.
Furthermore, entities subject to the oversight of the Auditor General’s Office were required to submit a copy of the budget draft to the Office ten days before the relevant committee’s meeting with the Ministry of Finance, for review and feedback.
The directive emphasized the necessity of adhering to prescribed spending ceilings and avoiding any exceedances when entering data into the financial system, while discussing any breaches with the Ministry and providing justifications for them.
The Ministry called for the continuation of expenditure rationalization policies, enhancing the efficiency of collecting government revenues and outstanding debts, prioritizing construction projects, and reviewing service fees to increase their value in line with their actual worth. It further stipulated that no new financial requests should be submitted after the budget bill is presented, nor should appropriations be added for line items that were not spent in the previous three years, unless clear justifications are provided.
The circular clarified that this approach is based on Cabinet decisions, which approved preparing the budget on a rolling three-year estimate basis. Under this framework, the first year’s estimates are prepared in accordance with constitutional procedures, while the estimates for the subsequent two years serve as indicative budgets forming a medium-term planning framework.
The circular stressed the necessity of preparing revenue estimates based on scientific foundations, relying on revenues collected during the previous three fiscal years and those expected to be collected in the current year, while taking into account accumulated uncollected revenues associated with services actually rendered.
Regarding the first chapter concerning employee compensation, the Ministry emphasized reviewing staffing needs and linking positions to government programs, ensuring that no positions or financial appropriations are included unless they are genuinely required.
It reaffirmed that no financial benefits, allowances, or bonuses should be included unless mandated by laws or decisions issued by competent authorities, while adhering to replacement policies and the Kuwaitization of government positions.
The Ministry also urged entities to submit staffing requirements for new employees using approved templates, prioritizing the employment of Kuwaitis, and refraining from creating new positions for non-Kuwaitis during the 2027–2028 fiscal year, except in accordance with approved regulations.
The Ministry directed government entities to estimate their needs for goods and services based on actual requirements, minimize operational expenditures as much as possible, and rely on existing contracts, measurements, and actual expenditures from previous years when preparing estimates.
It further stressed the submission of detailed data on the current technical infrastructure, including hardware, software, networks, application systems, and existing contracts, as well as data on technical staff and consultants.
The Ministry affirmed the necessity of including annual development plan projects within the budget estimates of government entities, standardizing project names between the plan and the budget, and determining their financial costs according to budget classifications.
It clarified that projects are subject to monitoring and supervision to ensure their implementation aligns with approved programs, and that no financial transfers within specific line item categories are permitted without the approval of the Ministry of Finance.
