THE Shura Council has unanimously rejected a move to force government-owned companies, authorities and organisations to pump their profits into the public coffers.
Under amendments proposed to the 2002 National Budget Law, these entities would have been obliged to refer their gains to the Finance Ministry to fund projects.
It is the second time that the chamber has rejected the move following two approvals by parliament.
This means that the issue now gets listed for a joint National Assembly session, something that has never happened since the bicameral chamber system was introduced in 2002.
“We are committed to increasing public revenues but this has to come through the right approach without any negative outcomes that could lead to a catastrophe,” said financial and economic affairs committee chairman Khalid Al Maskati at yesterday’s weekly session.
“Those who believe such contributions would increase revenues are wrong; the increase will be temporary, as in return we will condemn those companies, authorities and bodies with the death sentence eventually or gradually at a certain point.
“There are 21 ministries and government bodies that contribute to the budget and there are 22 authorities and bodies that need their finances through internal circulation and we can’t take from them because it would affect their working mechanism.
“And companies under the Bahrain Mumtalakat Holding Company, the government’s sovereignty fund, are fully independent of the government even if owned by the state.
“MPs’ addition of the transfer of sufficient amounts is disastrous since it would mean at the time taking most of the money and leaving the minimal, not knowing that the minimal can’t push forward with future expansions or developments within the year, emergencies or whatever may come.”
Shura Council member Ali Al Aradi, who is parliament’s former first vice-chairman, said some companies or authorities are running at a loss; this means the government will have to bail them out should they go into the red.
Member Mona Almoayyed said companies and authorities would ignore proper financial governance, knowing that the government would step in and support them in case of need.
Finance and National Economy Ministry assistant under-secretary for financial operations Taha Faqihi said the proposed move would cause disruption to financial operations and affect the national deficit should those contributors go in the red.
“The government will need to check on them whether they have money or not to contribute and if they can’t, to ensure their continuation – public money needs to be transferred in a two-way deal.
Operations
“The operations of those companies and authorities are under legislators’ monitoring and they could easily know what is going on there.”
Shura first vice-chairman Jamal Fakhro said the companies were contributing to the budget willingly.
“This happened in the past with Mumtalakat, NogaHolding and others based on approval from the companies’ general assembly, but if the profits are needed they wouldn’t have contributed.
“Had it been made an obligation a company like Tatweer Petroleum that came out of NogaHolding profits wouldn’t have existed.”
mohammed@gdn.com.bh
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