Study guide: Public Budget Principles and Process

📋 Course Outline

1. Defining Public Finance
2. Sources of Public Finance Law
3. Conceptions of State Financial Power
4. Public Finance and Public Law
5. Public Finance and Other Disciplines
6. Public and Private Finance
7. Taxation and Its Public Purpose
8. Tax Burden and Taxpayer Capacity
9. Options for the Tax Base
10. La liquidation de l’impôt
11. Le recouvrement de l’impôt
12. Le contentieux fiscal
13. Classical Budgetary Principles
14. Modern Budgetary Principles
15. Preparing the Finance Bill
16. Parliamentary Review and Adoption
17. Budget Execution and Operations
18. Control of Budget Execution

📖 1. Defining Public Finance

🔑 Key Concepts & Definitions

• Political financial intermediation: The reallocation of resources within society outside the market circuit, through a budgetary process linking resource collection and redistribution or through rules that act on prices.

★ Must-know

📌 The organic criterion identifies public finance by the legal status of the actor, whereas the material criterion identifies it through public funds and their use.

📌 The public-power-prerogatives criterion treats financial activity as public when it uses powers of command, while P.M. Gaudemet also requires a public-service mission; this criterion can divide one organization’s activities and relies on an imprecise concept. - M.DUVERGER

Further detail

• In French, “finance” originally referred to payment, while the plural “finances” refers to the revenue and expenditure operations of legal persons.

• F. Deruel’s 1971 account associates public finance with administering the financial activities of public persons or public communities. - F.DERUEL, Finances publiques

• P.M. Gaudemet defines public finance as the branch of public law studying rules and operations concerning public funds, using their allocation to a public service as a criterion. - P.M GAUDEMET, Précis de finances publiques, 1977

📌 The public-funds criterion may rely on possession by a public body, an establishment’s administrative regime, or the funds’ origin, so public funds are not identified solely by allocation to a public service.

💡 Memory Hook

Public finance follows political intermediation, not simply the identity of the organization.

📖 2. Sources of Public Finance Law

★ Must-know

📌 Formal sources are techniques through which law is expressed, whereas real sources are the underlying origins from which legal norms draw their substance.

• Article 70(3) of Burundi’s Constitution establishes equality before public charges and allows exemptions only by law; article 70(4) provides for solidarity in charges arising from national or natural disasters.

• Article 164(5) of Burundi’s Constitution reserves the definition of the tax base and rates of taxes and duties to legislation, establishing tax legality.

• Normative internal sources include:

  • the Constitution
  • laws
  • regulations
  • general principles
  • contracts

• The formation of State financial power proceeded from rules on tax revenues to rules governing the use of tax proceeds.

• The course identifies the English Charter of 1215, granted by John Lackland, as the starting point for establishing consent to taxation; the principle was later recalled in the Petition of Right (1628) and the Bill of Rights (1689).

• In France, the Revolution of 1789 established recognition of the principle of consent to taxation, and article 13 of the Declaration of the Rights of Man and of the Citizen called for a common contribution distributed among citizens according to their means.

• The budgetary principles include:

  • annuality
  • unity
  • universality
  • speciality
  • balance

Further detail

• Article 167 of Burundi’s Constitution requires the Finance Act to determine the State’s resources and expenditures for each year, while articles 181 and 182 address budget-voting procedure and article 183 establishes a Court of Accounts to examine and certify public-service accounts.

• Burundi’s Law No. 1/20 of 20 June 2022, revising Law No. 1/35 of 4 December 2008, sets budgetary principles and rules for public-resource and expenditure determination, Finance Act content and procedures, and control and public-agent responsibility.

• Article 14 of the 1789 Declaration of the Rights of Man and of the Citizen states that citizens may determine the necessity, consent, use, amount, tax base, collection, and duration of public contributions.

📌 International financial cooperation uses bilateral or multilateral conventions to address issues involving multiple sovereign states, including customs taxation, double taxation and tax evasion, mutual tax-collection assistance, and common financial standards in community treaties.

📌 Before taxation by consent, patrimonial taxation funded community expenses from the political leader’s personal resources, while later rulers claimed subsidies from subjects for specified expenses.

• Article 14 of the 1789 Declaration gives citizens the right, personally or through representatives, to consent to public contributions and oversee their use and determine their amount, tax base, collection, and duration.

📖 3. Conceptions of State Financial Power

🔑 Key Concepts & Definitions

• Socialist economy: An economy characterized by collective ownership of the means of production and authoritative economic planning.

★ Must-know

📌 The non-interventionist conception, rooted in economic liberalism, limits the State to maintaining order and essential public services, whereas the interventionist conception makes State action in the economy a regular feature.

• Classical public finance is characterized by:
  • a relatively small budget
  • mainly administrative expenditure
  • a neutral tax used to cover public expenses
  • a balanced budget

Further detail

• The First World War and the 1929 crisis revealed limits of economic liberalism and helped prompt State intervention in economic and social affairs.

• Interventionist public finance features: a larger budget, budget decisions with significant economic-policy influence, coordination with credit policy, coordination with monetary policy, coordination with foreign-trade policy

📌 Interventionist fiscal policy uses taxes to influence economic behavior, while classical fiscal policy uses taxes primarily to cover public expenditure.

• Interventionist public spending may include:

  • economic or social transfers
  • subsidies
  • loans
  • advances
  • public investment

• In the described USSR system, the budget represented about 60% of national income, compared with approximately 10% in capitalist countries; the GOSPLAN directed planning and the GOSBANK controlled monetary circuits.

• In the described USSR system, about 90% of budget revenue came from the economy and taxes paid by the population contributed approximately 9% of revenue.

• The course characterizes developing countries by primary-product export dependence, deficient industrial infrastructure, low-productivity agriculture, and high unemployment or underemployment.

📌 National savings may be mobilized voluntarily through borrowing, compulsorily while savers retain ownership, forcibly through compulsory loans, or through inflationary forced saving caused by a gap between remuneration and rising prices.

📌 Foreign aid may be private, through foreign companies or groups providing loans or establishing businesses, or public, through international organizations or foreign governments providing financing or foreign exchange for equipment.

• The course identifies reduced operating budgets and diversified investment, including infrastructure, hospitals, and socio-economic operating expenditure, as conditions for directing savings toward productive development.

💡 Memory Hook

Classical finance seeks a neutral, balanced budget; interventionist finance uses spending and taxation to influence the economy.

📖 4. Public Finance and Public Law

★ Must-know

• Article 14 of the 1789 Declaration of the Rights of Man and of the Citizen recognizes citizens’ right to establish the need for public contributions, consent to them, monitor their use, and determine their characteristics.

📌 In a federation, genuine federalism depends on whether federated communities have real financial autonomy or depend on subsidies from the central state.

📌 Administrative decentralization is real only when decentralized services have their own resources and genuine financial autonomy.

Further detail

• The Constitution of Burundi places the tax and monetary systems, public resources and expenditures, and fundamental rules for voting finance laws within the domain of legislation.

• In the British parliamentary system, executive dominance is largely attributed to its control over the budget.

• The limited financial powers of the United States president help explain why the American system is often more congressional than presidential.

• The organization and status of the Ministry of Finance’s administration, as well as tax litigation, fall within administrative law.

• Financial controllers can influence public-service managers’ decisions because of their financial responsibilities.

📌 A public accountant may oppose measures that violate financial regulations because of the accountant’s financial responsibility.

💡 Memory Hook

Financial rules shape public institutions, while institutions also govern financial mechanisms.

📖 5. Public Finance and Other Disciplines

★ Must-know

• Tax revenues depend substantially on economic conditions, and borrowing possibilities are determined by the current economic situation.

📌 Public spending may be reduced to combat inflation or increased to stimulate economic activity, depending on economic conditions.

• Tax systems reflect countries’ social and political structures rather than being merely collections of abstract legal rules.

Further detail

📌 In economies with little diversification, limited trade makes tax collection difficult and public resources are often insufficient.

• Governments use taxation to encourage the modernization of businesses’ equipment.

• Public investment spending can transform economic structures, while public spending can also serve as a tool of short-term economic policy.

• Tax policy studies principles such as tax neutrality and tax justice, while budget-policy rules guide the legal preparation and execution of budgets.

• Financial information helps political science objectively analyze policy content, assess the relative importance of education, research, or economic action through functional budgets, and identify a political party’s support base from its funding sources.

💡 Memory Hook

Economic conditions shape financial operations; financial operations then influence the economy.

📖 6. Public and Private Finance

🔑 Key Concepts & Definitions

• Public finance: Studies public funds, whereas private finance studies the wealth available to individuals.

★ Must-know

📌 Public finances are governed by state intervention and public authority, whereas private finances and private fund movements are governed by supply and demand in capital markets.

📌 Public finance pursues the general interest, whereas private finance is oriented toward profit.

Further detail

📌 The state can compel the payment of public revenues but cannot use that compulsion to carry out expenditures, whereas private individuals cannot compel revenues and can be compelled to pay their debts.

📌 Public finance uses central money, which the state controls to some extent, whereas private money takes the form of claims representing the liabilities of private banking, industrial, or commercial agents.

• For both public bodies and individuals, financial power is a condition and measure of independence and autonomy.

• Public and private financial resources both derive from national activity, and the financial market is a whole within which economic policy requires a global financial policy.

• 🔄 Financial management follows three stages.:

  1. Define objectives and means
  2. Execute the chosen policy through revenues and expenditures
  3. Close the management period and establish its results

💡 Memory Hook

Public finance serves the general interest through state power; private finance pursues profit through market exchange.

📖 7. Taxation and Its Public Purpose

🔑 Key Concepts & Definitions

• Tax: A compulsory levy intended primarily to fund public coffers and measured according to taxpayers’ contributive capacity.
• Parafiscal taxes: Compulsory levies collected for an economic or social purpose for the benefit of a public or private legal entity other than the state, territorial authorities, or their administrative public establishments.
• Social contributions: Payments made directly or through an employer to the INSS by persons compulsorily affiliated to social security in order to acquire and maintain entitlement to benefits for illness, disability, old age, death, and occupational accidents.
• Forced loan: A state technique for obtaining resources when voluntary subscriptions are insufficient.

★ Must-know

• Taxation is an expression of state sovereignty: the state establishes taxes unilaterally and collects them through compulsion.

📌 Classical liberal theory treats funding public expenditure as the tax’s sole purpose and calls for absolute tax neutrality, whereas modern neutrality accepts economic influence provided taxation does not distort production circuits.

📌 When financial objectives conflict with economic or social objectives, the financial objective should take precedence because tax revenue has no substitute for funding the Treasury, economic and social policies have other instruments, excessive taxation risks confiscation, and fiscal complexity and instability can reduce revenue.

Further detail

• Voluntary contributions do not use compulsion to finance public expenditure, but attempted experiments with this method have been disappointing.

• A voluntary loan is a means of raising public resources and resembles a tax as a levy on private resources, but it is voluntary and involves loan-specific issues such as interest and guarantees, unlike taxation’s issues of tax base, assessment, and collection.

• Parafiscal levies serve an economic or social interest, benefit specified entities other than the state and territorial authorities, and are established by regulation; ordinary taxes serve the general interest, benefit the state or territorial authorities, and are established by law.

• Social contributions benefit social security organizations and cover social expenditures without annual legislative authorization, whereas taxes benefit the state and territorial authorities, cover all public expenditures, and require annual legislative authorization.

• A forced loan is repayable and bears interest, whereas a tax is definitive and gives no direct consideration; both involve similar control issues and cause an economic loss of wealth.

• Taxes can pursue economic objectives through a general reduction of excess purchasing power to fight inflation or selective incentives such as encouraging construction to address a housing crisis.

• Taxes can pursue social objectives by reducing inequalities through progressive income taxation and tax relief on necessities alongside higher taxes on luxury goods, or by discouraging alcohol through taxation of alcoholic drinks and tax relief on fruit juices.

📖 8. Tax Burden and Taxpayer Capacity

🔑 Key Concepts & Definitions

• Tax: A compulsory monetary levy for the state, local authorities, or public establishments on a beneficiary of a particular advantage provided in connection with a public service, without a necessary correlation to the service’s cost.

★ Must-know

• G. JEZE proposed that public charges should be distributed according to taxpayers’ contributive capacities rather than the benefits they receive from the state.

Further detail

• The insurance-premium theory treats tax as payment for the security provided by the state, but it is rejected because the state has functions beyond security and, unlike insurance, protects against a disaster rather than indemnifying after it.

• The tax-as-price theory treats tax as payment for state services, but it is rejected because no correspondence can be established between each taxpayer’s tax and the services received by that taxpayer.

• A public-service price remunerates a particular service, is collected by industrial and commercial services, and does not require compulsion; unlike a tax, it is the service’s own object of collection and may be set by agreement or by the enterprise’s management.

• Taxes and fees are collected on the occasion of a public service rather than for the service’s own object, so the service can continue even if the levy disappears; taxes, unlike prices, are collected by compulsion and are classified as taxes under Article 164(5) of Burundi’s Constitution.

• Social contributions provide entitlement to social security benefits, but their amount is not related to the insured person’s exposure to the covered risk or equivalent to the benefits received, and employers often pay them without direct personal interest.

• Under the contributive-capacity principle, taxpayers include nationals and resident foreigners who participate in the state community through solidarity, regardless of their title of participation.

• Income is a better taxable base than expenditure for revealing a citizen’s contributive capacity.

• Tax should be calculated by considering factors affecting contributive capacity, including the taxpayer’s personal situation and the nature and quantity of the taxable matter.

💡 Memory Hook

Taxes reflect contributive capacity, not the individual services received.

📖 9. Options for the Tax Base

🔑 Key Concepts & Definitions

• Civil-law income: A monetary sum arising periodically from a permanent source, such as capital, labor, or an ability to generate resources.
• Taxable income: Follows fiscal autonomy, which allows tax law to give concepts a meaning different from other branches of law; it includes benefits in kind, capital gains, and occasional or accidental income.
• Capital: Wealth consolidated in a taxpayer’s assets and possessing a degree of stability; it includes real estate and movable assets, as well as income-producing and non-income-producing assets.
• Consumption expenditure: The transfer of wealth a taxpayer accepts in order to obtain a good or service, although the boundary between consumption and capital is not always clear.
• Droits de douane: Des droits établis aux frontières sur les produits importés et exportés.

★ Must-know

📌 A real tax applies to taxable matter without regard to the taxpayer, whereas a personal tax accounts for the taxpayer’s personal situation, such as family responsibilities or marital status.

• L’impôt synthétique sur la dépense globale porte sur le montant total des recettes et peut être établi selon différentes techniques.

• Dans l’impôt unique à la production, l’impôt est perçu au moment de la production, incorporé au prix et supporté par le consommateur.

📌 L’impôt cumulatif sur les transactions est perçu à chaque transaction, s’ajoute à chaque fois et doit rester léger parce qu’il frappe plusieurs fois.

• Dans l’impôt sur la valeur ajoutée, chaque intermédiaire paie une taxe sur la valeur ajoutée au produit, après imputation de la taxe déjà payée sur les matières premières.

Further detail

• Real taxation can reduce fraud, exclude reliefs, and simplify assessment, but its narrow tax base can reduce yield; personal taxation adapts liability to individual contributive capacity but can involve fiscal intrusion and threaten yield through individual adjustments.

• A general income tax applies to total income and captures the taxpayer’s overall situation but cannot differentiate rates by income type, whereas particular income taxes can differentiate rates, assessment methods, and collection methods by income type.

• A tax assessed on capital but paid from income uses relatively low rates and is considered the best form of capital tax, whereas a tax assessed and paid from capital is dangerous because it destroys capital.

• A one-time crisis levy on capital asks the wealthy for an immediate sacrifice instead of borrowing, as illustrated by Germany’s post-World War I “sacrifice tax for the distress of the Empire” and France’s 1945 “national solidarity tax.”

• One-time capital levies face difficulties in identifying movable assets and cash, collecting quickly from taxpayers without liquid funds, and maintaining fair assessment when contributive capacity changes between valuation and payment.

📌 Inheritance duties are a common form of capital levy and may allow personalization and progressivity, but their yield is low and they can encourage waste of family wealth, disrupt family ties, threaten businesses, and encourage investment in easily concealed assets.

💡 Memory Hook

A tax base may emphasize the person, income, capital, or consumption.

📖 10. La liquidation de l’impôt

🔑 Key Concepts & Definitions

• Liquidation de l’impôt: Le calcul du montant de l’impôt à verser au Trésor à partir de l’évaluation de la matière imposable et du tarif.
• Tarif: L’ensemble des règles qui déterminent les opérations à effectuer sur la matière imposable pour obtenir le montant de l’impôt.
• Rôle nominatif: Une liste de contribuables indiquant, pour chacun, la quantité de matière imposable recensée et le montant correspondant de l’impôt.

★ Must-know

• Selon le critère administratif, l’impôt direct est perçu par voie de rôle nominatif, tandis que l’impôt indirect est perçu sans rôle nominatif.

• Selon le critère économique, l’impôt est direct lorsque le contribuable légal en supporte définitivement la charge et indirect lorsque le payeur légal peut la répercuter.

• Selon le critère fiscal, l’impôt direct frappe une matière imposable relativement stable, tandis que l’impôt indirect frappe des faits intermittents, accidentels ou transitoires.

• L’évaluation indiciaire utilise un signe extérieur à la matière imposable, tandis que l’évaluation forfaitaire retient un élément attaché à cette matière et en estime la valeur moyenne.

• Le forfait légal détermine la base d’imposition à partir de données fixées à l’avance par le législateur, tandis que le forfait conventionnel résulte d’un accord entre le contribuable et l’administration fiscale pour une durée déterminée.

• Le taux est le pourcentage prélevé sur un élément de la matière imposable, tandis que le tarif peut aussi comprendre des abattements et une division en tranches soumises à des taux différents.

• L’impôt proportionnel conserve un taux constant quelle que soit la quantité imposable, tandis que l’impôt progressif augmente son taux avec la quantité imposable.

Further detail

• L’impôt mobilier et l’impôt sur le revenu d’emploi ne sont pas directs selon le critère administratif, car ils ne sont pas perçus par rôle nominatif, mais ils sont directs selon le critère fiscal, car ils frappent des situations stables.

• L’évaluation par le contribuable consiste à déclarer et évaluer lui-même la matière imposable qu’il détient, tandis que l’évaluation par les tiers peut être effectuée par les payeurs de revenus, tels que les employeurs.

📌 L’impôt de répartition fixe à l’avance le produit total, ensuite réparti entre les circonscriptions, tandis que l’impôt de quotité fixe à l’avance le taux et laisse incertain le produit.

📖 11. Le recouvrement de l’impôt

🔑 Key Concepts & Definitions

• Recouvrement de l’impôt: L’ensemble des opérations destinées à obtenir le paiement de la dette fiscale.
• Avis à tiers détenteur: L’avis à tiers détenteur oblige les personnes qui détiennent ou doivent des sommes appartenant au redevable à les verser au fisc en paiement des impositions dues.

★ Must-know

📌 Le contribuable est la personne à l’égard de laquelle l’impôt est établi et qui doit le verser, tandis que le redevable est la personne à laquelle le fisc peut réclamer le paiement même si l’impôt n’a pas été établi à son nom.

• La retenue à la source permet au fisc de réclamer l’impôt à une personne autre que le contribuable, généralement le payeur du revenu, qui retient l’impôt sur la somme versée et le reverse au fisc.

📌 Au Burundi, l’impôt est en principe payé en argent, et un contribuable ne peut pas éteindre sa dette fiscale par compensation avec une créance qu’il détient sur l’État.

• L’impôt ou le supplément d’impôt peut être réclamé pendant trois ans à compter de la déclaration, tandis que l’action en recouvrement se prescrit par dix ans à compter de l’exigibilité.

• Après une lettre de rappel laissant au contribuable quinze jours à compter de sa réception pour payer, le fisc peut engager la phase judiciaire, saisir les biens concernés et les vendre aux enchères.

Further detail

• Au Burundi, la retenue à la source est utilisée pour recouvrer l’impôt sur le revenu d’emploi, l’impôt sur les valeurs mobilières et divers autres prélèvements.

📌 Les impôts directs bénéficient traditionnellement de délais de paiement, tandis que, pour les impôts indirects, la déclaration de la matière imposable et le paiement sont simultanés.

💡 Memory Hook

Le contribuable est visé par l’établissement de l’impôt ; le redevable est celui que le fisc peut solliciter pour le paiement.

📖 12. Le contentieux fiscal

🔑 Key Concepts & Definitions

• Contentieux fiscal: L’ensemble des voies de droit qui règlent les litiges nés à l’occasion de l’application de la loi d’impôt.
• Budget: Une prévision des dépenses et des recettes de l’État, votée chaque année par le Parlement dans une loi de finances.

★ Must-know

• Le contentieux de l’imposition porte sur le bien-fondé de l’impôt, son montant ou la régularité de la procédure d’imposition, tandis que le contentieux du recouvrement porte sur les opérations d’exécution du paiement.

• Avant de saisir le juge en matière d’imposition, le contribuable doit présenter une réclamation écrite à l’administration ayant établi l’impôt dans les trente jours calendaires suivant la réception de la note d’imposition.

• La réclamation préalable et le recours juridictionnel ne suspendent pas le paiement de l’impôt, et le contribuable doit payer 30 % du montant contesté ou la partie non contestée si son montant est supérieur.

• Le budget est: un acte de prévision, un acte législatif, un acte d’autorisation des recettes et des dépenses, un acte politique exprimant la confiance du Parlement envers le Gouvernement

📌 Le budget estime les recettes et les dépenses à venir, tandis que le compte présente le résultat de l’exécution du budget et porte sur le passé.

Further detail

• Le Commissaire général statue sur la réclamation dans les trente jours suivant sa réception, avec une prorogation possible de trente jours supplémentaires, et la Commission paritaire d’appel statue dans les soixante jours calendaires suivant la réception du recours.

• Le sursis à l’exécution de l’acte d’imposition exige qu’au moins un moyen paraisse sérieux et que l’exécution risque d’entraîner des conséquences difficilement réparables.

• Au sens formel, le budget est un acte législatif, tandis qu’au sens matériel, il présente les prévisions de recettes et de dépenses.

• Le budget est élaboré unilatéralement et porte sur les recettes et dépenses de l’État, tandis que le plan est élaboré de manière concertée et couvre des domaines plus larges, tels que la recherche, l’énergie et l’industrie.

• Le budget est une représentation chiffrée des recettes et des dépenses, tandis que la loi de finances est l’acte juridique qui autorise ces recettes et ces dépenses et peut aussi contenir des dispositions financières, fiscales ou comptables.

💡 Memory Hook

Le contentieux de l’imposition porte sur l’assiette ou la procédure ; le contentieux du recouvrement porte sur l’exécution du paiement.

📖 13. Classical Budgetary Principles

🔑 Key Concepts & Definitions

• Universality principle: Pools tax and other revenues into a single mass from which all expenditure is charged.
• Unity principle: Requires budgetary authorizations to be granted in a single law.
• Specialty principle: Requires each budget operation in revenue or expenditure to be identified clearly and precisely.
• Budgetary balance principle: The budgetary balance principle requires expenditure to equal revenue, while financial and economic balance may allow productive investment to be financed by borrowing and a deficit when economic conditions permit or require it.
• Limitation principle: The limitation principle means that budgetary authorizations are ceilings: tax revenue must be collected under applicable laws, borrowing authorization must be used to reduce the deficit, and expenditure may not exceed its authorized estimate.

★ Must-know

• The annuality principle requires the budget to be voted on and executed annually.

• Program authorizations allow Parliament to authorize commitment of all spending for a multi-year program, while payment credits are granted as works or services are performed.

• Under the rule of non-allocation, all public revenues cover all public expenditure.

• Under the rule of non-compensation, all revenues and expenditures must be entered in the budget at their gross amounts.

Further detail

• Provisional twelfths provide, for one month, credits equal to one-twelfth of the previous year's credits.

📌 A budget may be renewed by reusing the previous year's budget for a period equal to one year.

• Multi-year budget exceptions include biennial budgets approved for two years and legislative-term budgets approved for one legislature.

📌 Credit carryovers allow unused credits from the previous fiscal year to be spent, but are in principle prohibited.

• Exceptions to non-allocation include: budgetary funds used according to the contributor's wishes, restoration of credits from reimbursements for improperly paid expenditure, gifts and bequests with special conditions, parafiscal taxes earmarked for economic or social expenditure

• Exceptions to non-compensation include Treasury special accounts for temporary fund movements and parastatal organizations whose budget operations are recorded in their own budgets rather than the State budget.

• Budget annexes under Article 8 of the LOFP and Treasury special accounts are accommodations to the unity principle.

💡 Memory Hook

Annuality limits the budget in time; unity gathers authorizations in one law.

📖 14. Modern Budgetary Principles

🔑 Key Concepts & Definitions

• Sincerity principle: The sincerity principle requires published budgets and accounts to be prepared sincerely and entails both accurate accounts without intent to distort the main balance of the finance law and consistency between budget documents and other legal instruments.
• Transparency principle: The transparency principle requires information about budget preparation and execution to be accessible through timely or continuous documentation and diverse information.
• Readability principle: The readability principle helps people understand budget execution and control through titles, chapters, articles, paragraphs, programs, and actions.

📖 15. Preparing the Finance Bill

🔑 Key Concepts & Definitions

• Penultimate-year rule: The penultimate-year rule estimates revenue using the latest budget whose execution results are known, such as using 2019 results to estimate the 2021 budget.
• New measures: New measures are decisions that create or reduce charges in the coming year, and their allocation among ministries reflects political choices.

★ Must-know

• Budget outlines must account for:
  • unavoidable expenditure
  • economic conditions
  • plan forecasts

📐 Formula - The automatic expenditure estimate is $\text{Budget}_{2025}=\text{Budget}_{2024}+\text{necessary adjustments}-\text{exceptional measures}$.

📌 Under Article 28 of the LOFP, all credits are in principle limiting.

📌 Revenue estimates cannot simply use the previous year's results because tax receipts depend on economic factors, and indirect taxes are more sensitive to economic conditions than direct taxes.

• 🔄 The Finance Minister organizes budget discussions by: evaluating resources, grouping ministerial draft budgets and adding the minister's own needs, preparing a statement of estimated revenue and expenditure, negotiating necessary sacrifices with other ministers

Further detail

• Budget preparation is constrained by:

  • limited resources
  • prior commitments such as personnel credits
  • new recruitment

• Involuntary expenditure-estimation errors can result from technical designs and market conditions that cause financial slippage.

📌 Intentional underestimation may be driven by a wish to reassure creditors and support currency credibility, conceal problems such as unemployment, or limit the apparent deficit.

• Consequences of underestimation include:

  • lack of sincerity
  • obscure or insufficient forecasts
  • costs borne by taxpayers
  • distortion of the budget's appearance

• Under Article 30 of the LOFP, a global credit for unforeseeable accidental expenditure may be provided up to 2% of the State's general budget credits.

• In cases of urgency and compelling necessity, supplementary credits may be opened under Article 31(e) of the LOFP.

• Evaluative credits allow expenditure beyond the appropriation, as for public debt interest under Article 28 of the LOFP, whereas provisional credits cover expenditure caused by events only partly controlled by the administration and may be increased if insufficient.

• The penultimate-year rule can be precise in economic stability but may underestimate revenue during expansion and overestimate it during crisis; it also presupposes near-absolute stability in currency and prices.

• Direct revenue estimation uses results from the latest known twelve months and adjusts them for tax-rate changes and economic conditions.

💡 Memory Hook

Estimate needs and resources, submit proposals, negotiate, then obtain cabinet approval.

📖 16. Parliamentary Review and Adoption

★ Must-know

• 🔄 The Finance Committee may: hear members of the Government, consult other standing committees, assess the admissibility of parliamentary amendments

• 🔄 The bill proceeds through:

  1. National Assembly Finance Committee review
  2. transmission to the National Assembly
  3. National Assembly plenary discussion and vote
  4. Senate Finance Committee review
  5. Senate plenary adoption

• The finance law for the year must be voted on no later than 30 June.

📌 If the National Assembly has not ruled by 30 June, the previous year's budget is resumed through provisional twelfths under Article 182(3) of the Constitution.

Further detail

• During plenary adoption, a Finance Minister or another government representative presents the budget forecasts, the National Assembly Finance Committee rapporteur presents conclusions, and plenary debate ends with a vote.

📌 If the National Assembly has not ruled by 30 June, Parliament meets in Congress within 15 days to reconsider the finance bill; if it remains unvoted after that session, the Council of Ministers establishes the budget by decree-law under Article 182(4–5) of the Constitution.

📖 17. Budget Execution and Operations

🔑 Key Concepts & Definitions

• Budget credit: A legislative authorization for expenditure defined both by its purpose and by its authorized amount.
• Separation principle: The separation principle assigns decisions on revenue and expenditure to administrators and cash operations to public accountants, separating decision-making from execution.
• Public accountant: An agent qualified to carry out revenue, expenditure, or securities-management operations on behalf of the State, a local authority, or a public establishment.
• Payment: Payment is the act by which the State discharges its debt, and it is carried out by a public accountant.

★ Must-know

• A credit is a legal authorization independent of available cash: it may be exhausted while public cash remains, or remain unspent when public cash is empty.

• Limiting credits cannot be exceeded without new legislative authorization, evaluative credits may be exceeded, and provisional credits may be increased above their initial allocation.

• Commitment credits authorize the administration to undertake expenditure, while payment credits are granted each year to pay for work as it is completed.

• For expenditure, administrators handle commitment, liquidation, and authorization to pay, while public accountants make payment; for revenue, separation is maintained for non-tax revenue and direct taxes but may be relaxed for indirect taxes, where one service may assess and collect the tax.

• 🔄 Public expenditure proceeds through:

  1. commitment
  2. liquidation
  3. authorization to pay
  4. payment by the public accountant

📌 No payment of public revenue may be received without a prior revenue title; direct taxes use a nominative tax roll, indirect taxes still require a title, and State property revenue is collected against a title.

Further detail

📌 The State's debt-generating event may precede a credit, as when a State vehicle causes an accident, follow a credit, as when authorized works are later performed, or coincide with the credit, as when compensation is authorized for victims of a national disaster.

• Revenue authorizations apply the permanent general tax rules, are always evaluative rather than limiting, oblige the tax administration to collect revenue, and cover the revenue operation as a whole.

📌 Administrators follow the general administrative hierarchy and are subject to administrative control and flexible responsibility, whereas public accountants follow their own hierarchy under the Finance Minister and are subject to judicial control and strict responsibility.

• The separation serves: division of labor, administrators' assessment of appropriateness and accountants' focus on legality, distinct hierarchical and judicial controls

• Expenditure exceptions include: payment under a standing title, global payment orders for several creditors, secret funds distributed without a public accountant

• The Finance Minister is the State's principal spending authorizing officer under Article 47(1) of the LOFP and may delegate powers to agents under the minister's authority and to ministers and their subordinates under Articles 47(3) and 42(1).

💡 Memory Hook

For spending: commitment → liquidation → authorization to pay → payment.

📖 18. Control of Budget Execution

🔑 Key Concepts & Definitions

• Settlement law: Through the settlement and budget-accountability law, Parliament fixes final revenue and expenditure amounts, establishes final results, and makes necessary adjustments.

★ Must-know

• Budget execution must be controlled to prevent mismanagement or negligence, support regular administration, and verify compliance with the authorizations granted by Parliament.

📌 Under hierarchical control, every public agent is supervised by superiors, who may impose disciplinary sanctions, overturn a subordinate's decision, or make a decision the subordinate improperly refuses to make.

• The Court examines and certifies accounts of:

  • central State administration
  • municipalities
  • personalized administrations
  • public administrative establishments
  • public companies
  • projects financed with public funds

• The Court's control includes: financial control of accuracy, reliability, and completeness, regularity control against applicable standards, management control based on economy, effectiveness, and efficiency

Further detail

• Almost all revenue and expenditure operations are subject to general and multiple controls because financial administration is complex and citizens distrust administrators and politicians.

• Hierarchical control over accountants includes routine checks such as cash inspections and oversight by the State Inspectorate General, which monitors compliance with public-finance laws and regulations.

• The Finance Minister acts through committed-expenditure controllers under Article 50 of the LOFP, public accountants exercise legal control over authorizing officers, and the minister countersigns or co-authors texts with budgetary implications.

• In Burundi, the Court of Accounts is governed by Law No. 1/002 of 31 March 2004 on its creation, missions, organization, and operation.

• The Court informs through: control-mission reports, opinions on draft budgets, supplementary investigations, a report on the regularity of budget execution

📌 Parliamentary budget control is constitutionally necessary because Parliament grants budget authorizations, but it is difficult because it is technical, occurs after execution, and requires time.

• Parliamentary control during execution includes:

  • government reports
  • oral and written questions
  • on-site and documentary investigations
  • finance committees
  • votes on supplementary finance laws

• The settlement law may be delayed because the fiscal-year system postpones presentation of accounts and the Court of Accounts needs time to complete its audit.

📊 Synthesis Tables

Classical and Interventionist Public Finance

Public and Private Finance