Republic of Macedonia has been implementing reforms in the field of local self- government over a long period of time. Fiscal decentralization is one of the priorities arising from the Accession Partnership of the Republic of Macedonia with the EU and it is closely related to intergovernmental transfers. Аccordingly, the Government has committed itself to careful and phased approach in implementing the fiscal decentralization.
The main principle of the phased approach is gradual transfer of competencies in accordance with the increase of the capacity of local authorities so as for them to undertake these responsibilities, while adequate and appropriate transfer of funds is provided. By the end of 2011, second phase of fiscal decentralization is carried out in all municipalities in the Republic of Macedonia, i.e all municipalities administer and financе their transferred competences in the field of education, culture, child care and social protection (except for Plasnica Municipality).
Government of the Republic of Macedonia undertakes certain measures and activities to strengthen the capacity to develop financing policies and capacity building for financial management of municipalities that contributed to a significant increase in their own revenues. The municipalities are constantly improving their own revenue collection, particularly the collection of property taxes.