Shura Council Rejects Proposed Amendments to the General Budget Laws and State-Owned Companies’ Profits

TDT | Manama

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The Shura Council discussed the report of the Financial and Economic Affairs Committee regarding a draft law to amend Article (10) of Decree-Law No. (39) of 2002 on the General Budget, and a draft law to allocate a percentage of the net profits of fully state-owned companies to the general budget.

The Committee Rapporteur, Dr. Abdulaziz Hassan Abul, stated that the committee recommended not approving the two draft laws. He noted that the proposed amendment conflicts with the current decree-law and affects the financial and administrative independence of public authorities and institutions. He also emphasized that oversight of state-owned companies is already ensured under existing legislation, including the Financial and Administrative Control Bureau Law and the General Budget Law.

Dr. Abul added that implementing the draft laws could have negative financial effects, such as the state bearing the losses of these companies, increasing public expenditures, and potentially raising the budget deficit. He also highlighted that imposing a mandatory percentage of profit transfer to the general budget could limit shareholders’ powers and affect the companies’ administrative independence, including their ability to make long-term investment decisions.

He stressed the need to balance supporting public revenues and financial discipline on one hand, with respecting the financial and administrative independence of entities operating under special regulations on the other.

The Council decided, in principle, not to approve the two draft laws and referred them back to the Council of Representatives for reconsideration.