24 Jun 2013
Getting there: A step-by-step guide to asking for a tax or price target
4. Gather basic information about the budget development process in your country
While you do not have to become a budget expert, you will need a basic understanding of the process in your country so that you can figure out when decisions are made, whom you should approach first in discussing proposed targets, and how to engage those selected officials in informed discussion about the process.
It is usually fairly simple to learn what you need to know about the process. And the alternative — not knowing the process — can be time-consuming and very unproductive.
Common potential mistakes are:
- Assuming the Minister of Health is the main conduit to budget decisions about tax. This is rarely the case with regard to tobacco tax decisions.
- Holding a press conference asking for tax increases — one month past the deadline for budget decisions.
- Tying initial requests for tax increases or tax policy to funding for tobacco control. Normally, these involve two completely different processes, and asking for tobacco tax increases as part of the tobacco control strategy will likely get you nowhere. Worse, asking for tobacco tax increases on condition that they be used to pay for the tobacco control strategy will almost guarantee a refusal of tobacco tax increases. (You can propose using tobacco tax revenue for tobacco control, but generally this comes after ministries of finance have bought into the concept of tobacco taxes being good in their own right.)
Just from following the news, you probably already have a general idea of the budget process. You can find out more by talking to government officials and other NGO contacts about how the system really works, which institutions are involved, and who influences various parts of the system.
Some key questions to ask in understanding the budget process, who to talk to, what arguments might work best, and when you need to intervene in order to have an impact include:
- What is the budget cycle? Depending on your political system and traditions, there may well be times of the year when finance officials are completely closed to discussions about tax policy (e.g. just before a budget announcement, or in the months following the announcement).
- What institutions are involved in the budget process? Ministry of Finance — which sections within the ministry? Does budget planning go through a planning institute or other government agency outside of the ministry?
- What parts of the process are politically driven (i.e. decided by elected officials)? What parts are managed by civil servants?
- What is your country’s overall fiscal picture? Governments with large deficits, or facing pressure for new expenditures, tend to be more open to increasing tobacco taxes than those in surplus or those elected on aggressive low-tax platforms or rhetoric.
- Are there elections in the near future? In some countries, any discussion of raising taxes shuts down months before a vote.
Who writes the budgets?
Budget processes or cycles vary around the world, but generally fall into one of two categories (or somewhere in between):
- In some systems, the Ministry of Finance, in consultation with other departments, produces a budget internally. The Finance Minister then presents the budget in Parliament, and virtually no changes are made to the budget after that point. This is particularly the case in parliamentary systems where budget votes are considered confidence issues — that is, where the budget is voted on as a single package and the government is automatically defeated if the budget is voted down. In this type of system, it is generally very important to cultivate relationships with finance ministry officials, including the Finance Minister him or herself.
- In other countries, the executive branch may produce a budget proposal, but legislators then haggle about the content line-by-line, often in committee, in a process that may take several months. In this type of system, key legislators may be important contacts, and there may be extensive input from external institutions (such as a council of economic advisors).