Alexey Buzu
This was pointed out by Alexei Buzu, Secretary General of the Government, during a discussion on budget transparency and local revenue management, organized within the framework of the MĂ IMPLIC (“I Intervene”) project.
In this sense, the authorities see the role of the local public administration reform in reducing the development gap between communities. “The reform of local public administration is not undertaken for austerity, but for consolidation,” said Buzu. – We need stronger mayoralties capable of managing projects and investments and developing communities”.
He noted that in the coming years, the government will allocate more and more resources for the development of communities, so it is necessary to strengthen the administrative capacity of mayoralties for a more efficient use of public funds.
The question that local government representatives ask in this context is what are the reasons for such a small share of local communities’ own revenues. In their opinion, it is because the main part of tax revenues is directed to the state budget. And they point out several aspects that should be paid attention to in order to increase it.
What the mayors propose
First, we are talking about income tax for individuals, which today is distributed at the place of work, so local administrations, especially in small villages are limited in receiving deductions for this tax. They propose to collect it at the place of residence. And part of the tax on income of legal entities should be directed to local budgets. Today it goes directly to the state budget.
It is also important how the reform undertaken on the real estate tax will be finalized. As well as the process of delimitation of property of the state and local communities. These are serious sources of revenue for local budgets.
People’s elected representatives also propose revision of the system of distribution of transfers from the state budget.
At the same time, mayors point out that it is the financial aspect of the reform that is least discussed during the ongoing discussions. What financial incentives the government envisages for the unification of mayoralties has not been announced yet. The provisions that were determined when the voluntary unification process was launched several years ago are still in effect. But they are small, which is why the opportunity to merge has only been used twice.
