Fiscal decentralization in the Republic of Macedonia – Process of redistribution of income sources between the central and local government of the Government of the Republic of Macedonia in Skopje The central government, caused by the legal and administrative decentralization, aimed at providing sufficient funding for financing new functions (competencies) of Units of local government (municipalities). Fiscal decentralization is based on political decentralization, that is, the transmission of certain functions or competencies from the central local government. The meaning of the decentralization of the functions is that decisions to meet public services that are more harmonized are consumer preferences, and also deciding on the financing of public services to leave “to those authorities closest to citizens” (European Charter of Local Self-Government). RM has rich experience in the sphere of local finance. With the constitution of the former Yugoslav Federation of 1974. An extreme vertical decentralization of the relation federation – republics – local units of government (municipalities) was established. There was also a pronounced horizontal decentralization, because the public funding included the different degrees of state power and the special self-governing entities – the self-governing interesting communities and the funds. S “By 1990, significant social activities and services, including education, health and urbanization, were managed and financed by local authorities. Reforms that performed since 1990 They led to political and fiscal centralization, which meant a significant limitation of the functions and financial resources of the local government. Later, the revenues and expenditures of the budgets of the local units were regulated by the Law on Budgets (1993), and their competencies (functions) with the Law on Local Self-Government (since 1995). With a share of 1% of local budgets in the total budget funds, RM entered the ranks of the highest centralized countries in Europe. Centralized financial relations did not correspond with the norms of the European Charter for Local Self-Government, which RM ratified in 1997. Based on the Reform Strategy of Local Self-Government since 1999, which respects the basic determinations of the European Charter for Local Self-Government, the new Law on Local Self-Government was adopted (2002) and the Law on Financing of Local Self-Government Units (2004). With the 2004 Law on Territorial Organization. Municipalities in the Skopje area and the City of Skopje were arranged as a separate unit. The list of competencies (functions) of municipalities in Macedonia is fully harmonized with the European Charter and includes: urban planning, environmental protection, local environmental development, communal activities, culture, sport and recreation, social protection and care for disabled and disabled persons, Primary and secondary education, primary health care and other classical local competencies. The wide list of competencies has actualized the problem of distribution of revenue sources with the central government and also the problem of grants for local budgets. Municipalities have revenues from the following sources: a) own revenues, b) joint income, and c) grants from the central government budget and the budgets of the funds. Own income consists of local taxes (property tax, inheritance tax and gift and sales tax on real estate and rights), local fees, local fees, property income and other income (donations, fines, etc.). Property taxes, fees and local fees introduce the Parliament of the Republic of Macedonia, which means that they apply uniformly in all municipalities. Only the rates of property taxes can edit municipalities, but to certain limits. In the Macedonian system as a common tax (which can be treated and as a kind of grant for the municipalities), only personal income tax is envisaged, with the municipalities to the municipalities: (1) 3% of this tax on the basis of personal income from the salaries of the salaries of Individuals, which is collected in the current year in the municipality in which the bonds were reported with permanent residence and residence, and (2) 100% of this tax collected by natural persons registered for craft activity on the territory of the municipality. The grants are used to complement the basic system of distribution of income sources (taxes), due to the existence of a discrepancy between existing financial resources and expenditure needs (ie the so-called. Vertical fiscal imbalance) and due to differences in fiscal capacity between municipalities, due to unequal Economic development (ie on TN. Horizontal fiscal imbalance). The grants represent financial transfers from the central government budget and the budgets of the funds for the municipal budgets. The general grant is granted to finance all competencies of the municipalities, without in advance to determine the purpose or conditions under which it can be used. The global amount of general grant is provided in the amount of 3% of the total VAT revenues in the previous year, and the distribution is carried out at least 50% according to the residential income criteria, and the rest according to other criteria determined by the Government of the Republic of Macedonia. The target granted grants covers several types of transfers, as follows: (1) Targeted granted granted by municipalities based on a project, for a particular institution or a special program, which determines the competent ministry or the appropriate fund, (2) capital grant, which are granted the municipality for financing investment projects, based on a program determined by the Government of the Republic of Macedonia, (3) block-grant, which is granted on the basis of specific programs, for new competencies in culture, education, social protection, etc., and (4) granting for delegated jurisdiction. Implementation of fiscal decentralization takes place stage, starting from 1 and 2005. Lit.: Kesse Bogoev, the fiscal aspects of decentralization – essence and implications, “Bulletin of the Ministry of Finance of the Republic of Macedonia”, 7-8, 2004. J. A. Taki Fiti
Original article in Macedonian language Cyrillic alphabet
Кириличен напис ФИСКАЛНА ДЕЦЕНТРАЛИЗАЦИЈА ВО РМ