Phases of the fiscal decentralization

According to the Law on financing the local government in Macedonia, the fiscal decentralization is estimated to be realized in process and in stages, in accordance with institutional and fiscal capacity of the municipalities individually.
The first phase of fiscal decentralization began in July 2005 when amendments to the Law on Property Taxes, the Law on Communal Fees Law on administrative fees were made, which regulated the financial system of the local government, and thus the sources of financing and the authorities of the financial system of the local government.
According to Professor Abdulmenaf Bexheti (SEE University, Tetovo) this phase confirmed that the Republic of Macedonia has not installed system of fiscal decentralization, but it is a typical fiscal deconcentration, since most of the original municipal powers are financed through financial transfers from the central government and not through own local fiscal resources.
The second phase started in July 2007 only in those municipalities who successfully passed the “transition examination” and have provided personnel and financial fiscal capacity and financial liquidity for the first two years of the fiscal decentralization. Municipalities who succeeded in that phase provided the transfer of powers, and thus block financial transfers to:
– Culture
– Social protection and child protection
– Primary and secondary education
– Health care (public health and primary care)

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