‘Emirates Gate of GFS’ scheme expected to aid in measuring monetary activities accurately, Ministry of Finance says
THE MINISTRY of Finance has published the UAE version of Government Finance Statistics (GFS) system, a reporting system which compiles data that measures the financial activities of the government.
Dubbed the “Emirates Gate of GFS reports”, the new system is expected to aid officers in the analysis of the budget and financial activities, focusing on the government’s contribution to cumulative investment and savings, while also providing for comparison across the seven emirates.
“The Ministry of finance endeavours to use the best means to measure the government financial performance, as we aim to improve transparency processeses and work towards a greater conservation of public money,” said Saeed Rashid Al Yateem, Executive Director of Revenue and Budget at the ministry.
The GFS manual was issued by the International Monetary Fund (IMF) in 1986, and was largely cash-based. However, the new GFS manual (GFSM, 2001) has moved to accrual-based reporting.
Presenting fiscal statistics
The GFSM2001 provides guidance on how to present fiscal statistics so that they are comparable across the various divisions of government, and that the impact of the state’s activities should be presented in the framework of a balance sheet, similar to that of business accounting.
“To allow for comparability of government finance statistics within a country, for instance when comparing the fiscal activities of central, state, and local governments, the relevant institutional units should be consolidated and presented as standardised subsectors with the institutional coverage specified,” the IMF says in its latest manual.
Based on the GFS framework, the major fiscal summative presented in the Emirates Gate of GFS reports’ system include the government’s net debt, which shows the measure of the strength of the Government’s financial position and comprises selected financial assets and liabilities, and net financial worth, which shows the strength of the Government’s financial position but avoids valuation issues with non financial assets in measuring net worth. Others include fiscal balance and underlying cash balance.
“The Ministry of Finance aims to achieve its strategic goals through the coordination of fiscal policies while raising the efficiency of legislation and financial systems of accountability,” added Al Yateem.
Government officials also made a presentation relating to major strides achieved through the implementation of the Federal Financial System, lauding the network’s ability to harmonise budget reports, financial accounts, statistics and special management reports across the seven Emirates.
Second generation e-Dirham
During the same event, officials drawn from the ministry and from the National Bank of Abu Dhabi highlighted also the benefits of GCC Takamul system and the new services of the second generation e-Dirham – a more flexible system for making government payments.
“The startup launch of the two systems reflect the Ministry’s continuous improvement in the electronic services that support sustainable and flexible payment scheme for the UAE residents,” Al Yateem said.
Demonstrating how the GCC Takamul System works, Khalid Ali Al Bustani, the Assistant Undersecretary of International Financial Relations Sector at the Ministry of finance emphasised that, when fully integrated, the facility will enable the ministry to conduct specialised statistical operations that are offered by the UAE and GCC, as well as screening the areas that need improvement in the quality of transactions provided both inside and outside the country.
The executive showed how the system harmonises fiscal control and monetary policy between the ministry of finance and the Federal UAE Government, by helping to build a consolidated financial database for all ministries, federal entities and local authorities in each of the seven emirates.
“The system integrates the financial statements for different sectors, allowing the presentation of accurate information that will enable decision makers to prepare plans and take appropriate and necessary decisions to manage public expenditure in the UAE,” he explained.
GCC Takamul system
According to the official, the system also addresses various issues that include transportation and residence, professional practice, economic activities, real estate ownership, ownership and circulation of the purchase of shares, establishing companies, topics on the Customs Union and the obstacles of trade within the GCC region.
“The launch of GCC Takamul system is part of the ministry’s plan to streamline and ensure proper fiscal functioning in the Gulf Common Market and the Custom Union. The system is meant to ensure the best application of the market’s resolutions, by allowing the opportunity for GCC citizens to share their suggestions, complaints and observations. This initiative contributes to strengthening the market’s position as one of the most prominent economic blocs in the region and globally,” Al Bustani added.