Question 38

Does the Executive’s Budget Proposal or any supporting budget documentation present information on quasi-fiscal activities for at least the budget year? (The core information must include a statement of purpose or policy rationale for the quasi-fiscal activity and the intended beneficiaries.)
 * a. Yes, information beyond the core elements is presented for all quasi-fiscal activities.
 * b. Yes, the core information is presented for all quasi-fiscal activities.
 * c. Yes, information is presented, but it excludes some core elements or some quasi-fiscal activities.
 * d. No, information related to quasi-fiscal activities is not presented.
 * e. Not applicable/other (please comment).

Guidelines
Question 38 focuses on quasi-fiscal activities, asking whether “core” information related to such activities is presented. These core components include: The term “quasi-fiscal activities” refers to a broad range of activities that are fiscal in character and could be carried out through the regular budget process but are not. For example, a quasi-fiscal activity could take place if, instead of providing a direct subsidy through the budget for a particular activity, a public financial institution provides an indirect subsidy by offering loans at below-market rates for that activity. Similarly, it is a quasi-fiscal activity when an enterprise provides goods or services at prices below commercial rates to certain individuals or groups to support the government’s policy goals.
 * A statement of purpose or policy rationale for the quasi-fiscal activity (i.e., what is the reason for engaging in this activity?);
 * The identification of intended beneficiaries of the quasi-fiscal activity.

The above examples are policy choices that may be approved by the government and legislature. However, quasi-fiscal activities can also involve activities that violate or circumvent a country’s budget process laws or are not subject to the regular legislative approval process for expenditures. For example, the executive may issue an informal order to a government entity, such as a public commercial enterprise, to provide the executive with goods and services that normally would have to be purchased with funding authorized by the legislature. All quasi-fiscal activities should be disclosed to the public and subject to public scrutiny.

Beyond the core information, some governments may also provide other information about quasi-fiscal activities, including for example: the anticipated duration of the quasi-fiscal activity; a quantification of the activity and the assumptions that support these estimates; and a discussion of the fiscal significance and potential risks associated with the activity, including the impact on the entity carrying out the activity. Principle 3.3.2 of the IMF’s Fiscal Transparency Handbook (2018) provides examples of quasi-fiscal activities that can be consulted as needed. And more details on quasi-fiscal activities can be found in the Guide to Transparency in Public Finances: Looking Beyond the Core Budget.

To answer “a,” the Executive’s Budget Proposal or supporting documentation must present all of the core information related to all quasi-fiscal activities for at least the budget year as well as some additional information beyond the core elements. Answer “b” is also accepted if one of the core elements is not presented but additional information beyond the core elements is presented. To answer “b,” the Executive’s Budget Proposal or supporting documentation must present all of the core components noted above. A “c” answer applies if some information related to quasi-fiscal activities is presented, but some of the core pieces of information are not included. Answer “d” applies if no information is presented on quasi-fiscal activities.

If quasi-fiscal activities do not represent a significant problem in your country, please mark “e.”.” However, please exercise caution in answering this question.

External References

 * IMF’s Fiscal Transparency Handbook (2018), Principle 2.1
 * [http://internationalbudget.org/wp-content/uploads/Looking-Beyond-the-Budget.pdf Guide to Transparency in Public Finances: Looking Beyond the Core Budget