An additional 2 trillion tenge from the National Fund will be allocated to cover the budget deficit.

On Monday, a draft law titled "On Amendments and Additions to the Law on the Republican Budget for 2024-2026" was published for discussion. The budget adjustments pertain only to the year 2024. The main change is the increase in the targeted transfer from the National Fund to the budget by 2.0 trillion tenge (from 1.6 trillion to 3.6 trillion tenge), reports inbusiness.kz referencing the analytical center Halyk Finance.

Thus, the total amount of official transfers from the National Fund to the budget (both guaranteed and targeted transfers) will reach 5.6 trillion tenge. Considering the operations with shares of JSC "Kazatomprom" in July 2024 amounting to 467.4 billion tenge, the total transfers from the National Fund to the budget for this year will amount to 6.1 trillion tenge, analysts note.

In the explanatory note to the draft law, it is noted that tax revenues to the budget in 2024 will be 3.1 trillion tenge lower than planned figures.

"In our opinion, this decrease in budget revenues is the main reason for the increase in the targeted transfer by 2.0 trillion tenge and the operation with the shares of JSC 'Kazatomprom' by nearly 0.5 trillion tenge, as budget expenditures have remained unchanged. Thus, the additional targeted transfer from the National Fund is being used to cover the budget deficit, which has sharply increased due to the shortfall in tax revenues," writes the advisor to the HF chairman, Murat Temirkhanov.

In accordance with the Budget Code, targeted transfers from the National Fund may be allocated to the republican budget by the president's decision for financing: (1) anti-crisis programs during periods of economic decline or slowing growth rates, (2) socially significant national-scale projects, and strategically important infrastructure projects in the absence of alternative funding sources.

The use of targeted transfers to finance the budget deficit contravenes these provisions of the Budget Code.

"Overall, we would like to note a certain decline in the transparency of decisions regarding the use of the National Fund. For instance, for the first time in the middle of the year, a detailed report on the National Fund for 2023 was not published, which is also approved by the president's decree. In June, the Ministry of Finance issued an informational message stating that the report on the National Fund for 2023 was approved by decree, but the report itself has not yet been made publicly available. In our opinion, this is a negative trend that reduces the transparency of operations with the National Fund," the analytical note states.