Friday, October 20, 2006

OSCE poll finds decentralisation successful in Macedonia, tax collection still a challenge

Overall, decentralisation in Macedonia is being implemented successfully, without difficulties in most areas, according to mayors surveyed in a new poll by the OSCE monitoring mission. By a large majority, however, the mayors said fiscal decentralisation poses a big challenge.

The main difficulties in the financial area are administration of local taxes and fees, the survey found. Since revenue collection is the basis for normal functioning of local self-government units, assistance in this area will be vital if decentralisation is to proceed.

The OSCE poll was aimed at determining the results of the transfer of authority from the central to local levels that began in July 2005. It was conducted in Skopje, which functions as a separate unit of local self-government, and in 80 other municipalities.

Macedonia has a total of 84 municipalities, following the new law on territorial organisation that entered into force in 2004. Before then, Macedonia was divided into 123 municipalities.

The poll focused on financial management, urban planning, education, inter municipal co-operation, local communities, relations between communities and equality of genders. The results show significant progress in these areas.

"We have not only analysed and assessed the present conditions, but we offer recommendations for future activities of the local authorities that can be supported by the OSCE Mission and other members of the international community with the aim of better focusing and increasing the efficiency of the given aid," said Philip Stil, head of the Public Administration Reform Department with the OSCE Mission.

"Results of the poll and recommendations are an important guideline directing all the entities on the way of decentralisation. As the main partner of the government, we will continue to serve the municipalities as the lobbyists for their interests and will continue to develop our members' capacities, said Andrej Petrov, the chairman of Local Self-Government Communities.

Decentralisation in Macedonia formally started on July 1st 2005 when most responsibilities were transferred from the central to local levels. These include collection of property tax and a part of the VAT.

Under a decision made by the previous government, municipalities manage some sports facilities. The municipalities of Ohrid and Struga were also given the management of the Lake Ohrid coast, with the aim of boosting tourism.

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