The fiscal capacity and revenues of municipalities will improve through the changes to the Law on Financing of Municipalities, by which the rate of VAT and personal income tax block grants will gradually rise, said Prime Minister ZoranZaev and Finance Minister FatmirBesimi on Wednesday.
“Personal income tax revenues will rise from three to six percent by 2024. VAT revenues will be secured in the amount of six percent of the collected VAT in the previous fiscal year, starting from 2024,” PM Zaev told a press conference alongside Minister Besimi.
The Finance Minister said the draft-law also increases the control by the state, namely the financial inspection, with regards to the law on reporting and recording of liabilities and reports on violations of the law on financial discipline.
According to him, changes to the law on financing local self-government units will ensure stable revenues in municipal budgets.
In addition, reforms also include the setup of a new agency for regional and local development, which would ensure more funds for infrastructure projects for municipalities, thus contributing to faster regional development. The agency will allocate budget funds but also finances provided by national and international financial institutions for capital infrastructure municipal projects.