The Ministry of Finance (MoF) has projected budget revenues of LL16,384 billion ($11 billion) for 2017 and expenditures of LL23,670 billion ($15.7 billion).
The MoF aims to reduce the fiscal deficit to $4.8 billion from the $4.9 billion recorded last year, which will lower the deficit to GDP ratio to 8.7 percent from 9.3 percent, said Finance Minister Ali Hassan Khalil.
The 2017 budget figures take into consideration an anticipated economic growth of two percent.
The overall expenditures and revenues relating to the pay rise will be included in the budget once they are finally approved by Parliament which would reduce the deficit by almost $300 million, Khalil said.
He said Parliament is ready to reconsider its recent approval of some new taxes. These taxes, which aim to finance a pay rise of public sector employees, were approved earlier this month amid street protests. They include hiking VAT to 11 percent from ten percent and raising fiscal stamp fees and customs duties on imported alcoholic beverages and tobacco products. Parliament still has to approve other taxes and the planned salary hike.
The 2017 budget is the first budget since 2005. The government has been operating without a public budget for 12 years due to the political stalemate in the country.
Khalil said that each loan or grant agreement with foreign entities from now on will be duly recorded and controlled according to the State's accounting principles. Just ten percent of these loans and grants were registered according to these principles in the past, he said.
He also said that the new budget does not include any tax that targets the poor or low-income people.