Gradual transfer of competences to Local Government and increase of resources for their effective execution will improve public services the municipalities offer to citizens and companies, Vice Prime Minister and Minister of Finance, Zoran Stavreski said at the opening of today’s round table “Path to establishing system of financing equitable service delivery for all citizens” – next steps”.
 
Most Macedonian municipalities – 74 out of the existing 84 entered the second phase of fiscal decentralization, meeting the conditions for financing with block grants.
 
In the course of this year, Stavreski said that with respect to municipalities that are still in the first stage, Government will continue implementing specific activities to increase their administrative and fiscal capacity in order for they to be able to use block grants.
 
Vice Prime Minister pointed out the measures undertaken during last and at the beginning of this year, aimed at increasing the own revenues of municipalities. He mentioned the distribution of revenues from the sale of construction land and concessions for mineral raw materials to the municipalities, as well as the additional income from the environmental fee.
 
– By amending the Law on Financing Local Government Units at the beginning of this year, percentage of VAT revenues increased from 3 to 4.5 percents and it will be gradually realized by 2013, thus contributing to the increase of the budget of municipalities this and the next years, Stavreski said.
 
Minister of Local Government Musa Xhaferi believes that there is need of system which will provide greater financial viability and independence of municipalities, not jeopardizing the functions at national level.
 
– Best results are achieved when citizens are satisfied with the services rendered. It is very hard to appropriately meet all needs in conditions of limited financial resources. Thus as suggested by experts as well, minimum standards should be first set, on the basis of which, cost price of certain service will be determined. In such conditions, fiscal capacity of municipality will also show whether additional funds from the central budget are necessary or whether it can by itself meet the standard, Xhaferi said.
 
According to him, in future, probably most of the municipalities will need significant financial support such as earmarked grants for certain areas or general grant. – It is a matter of concept and expert assessment. However, it is high time to abandon the system which conditions earmarked and block grants with the existence of respective institution at local level, Minister Xhaferi pointed out.
 
Round table ““Path to establishing system of financing equitable service delivery for all citizens” – next steps” is organized by the Ministry of Finance and the United Nations Development Programme Country Office in Skopje. (MIA)
