Planning and approval

The legal basis for drawing up and execution of the budget is the Constitution of the Republic of Lithuania, Law on the Budget Structure, Law on Fiscal Discipline, Statute of the Seimas, Law on the Methodology on Determination of Municipal Budgetary Revenues, Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets for the Year Concerned, Rules for Drawing up and Implementation of Budgets approved by the Government, Decision on the Approval of the Municipal Budget for the Year Concerned made by relative municipal council and other legal acts regulating the receipt of budget revenue and funding of programmes.

Draft planned indicators of the consolidated aggregate of the State budget and municipal budgets for three budgetary years are prepared on the basis of the Government Programme, Stability Programme of Lithuania, State Progress Strategy, National Progress Programme, other planning documents approved by the Seimas and Government, Law on the Budget Structure, Law on Fiscal Discipline, other laws and other legal acts, national medium-term economic development scenario, European Union strategic documents on financial assistance, strategic action plans of appropriation managers, also programmes submitted by the State budget appropriation managers and draft estimates of programmes.

Draft financial indicators of the State budget and municipal budgets for the year concerned may deviate from the planned indicators of the consolidated aggregate of the State budget and municipal budgets for three budgetary years approved by the Seimas only in case, when the Government in writing submits to the Seimas the clarification on how the changes reflect new economic policy priorities.

The State budget and municipal budget planning, preparation and approval procedures are regulated by the Rules for Drawing up and Implementation of the State Budget of the Republic of Lithuania and Municipal Budgets approved by Government Resolution No 543 of 14 May 2001 and the Strategic Planning Methodology approved by Government Resolution No 827 of 6 June 2002  as well as by the Plan for Preparation of Draft Financial Indicators of the State Budget and Municipal Budgets (hereinafter – the Plan) for the subsequent year approved by the Government Resolution at the beginning of each year.

The Plan covers three basic work groups for drafting the budget:

1. Preparation and adjustment of the national medium-term economic development scenario;
2. Preparation and adjustment of the draft Government activity priorities and draft institutional strategic action plans;
3. Preparation of financial indicators of the State budget and municipal budgets.

The draft Government activity priorities for the next year are prepared at the beginning of each year.

State authorities and bodies provide the Ministry of Finance with the information necessary for the preparation of the medium-term economic development scenario according to the deadlines specified in the Plan.

Taking into consideration the deadlines specified in the Plan and following the Strategic Planning Methodology, the State budget appropriation managers prepare draft strategic action plans.

Based on the medium-term economic development scenario, draft common principles of key indicators of the consolidated aggregate of the State budget of the Republic of Lithuania and municipal budgets for three budgetary years as well as planning of the appropriations are prepared, on the basis of which maximum appropriations for each institution are set. Based on them, draft three-year institutional strategic action plans and draft State budget programme estimates are adjusted. Following draft strategic action plans and draft State budget programme estimates, institutional planning indicators are summarised and the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets for the Year Concerned (hereinafter – draft Budget Law) is drafted. In preparation of the draft Budget Law, a wide coordination process is deployed involving the Ministry of Finance and other ministries, state authorities and bodies.

The Ministry of Finance submits the draft Budget Law to the Government, which after its consideration forwards it to the Seimas no later than 75 calendar days before the end of the budgetary year.

Then the draft Budget Law is discussed in the Seimas. The committees of the Seimas and its members submit proposals concerning the draft Budget Law. After the Government makes relative decisions on these proposals, the draft Budget Law is reconsidered and approved in the Seimas, which has to approve the Budget Law no later than 14 calendar days before the beginning of the budgetary year. The Seimas also approves planned indicators of the consolidated aggregate of the State budget and municipal budgets (excluding State budget appropriations allocated to municipal budgets) – revenue and appropriations for three budgetary years.