Bulgarian Municipalities Demand 2-3% of Personal Income Tax

Business » FINANCE | March 6, 2014, Thursday // 15:57
Bulgaria: Bulgarian Municipalities Demand 2-3% of Personal Income Tax Photo by BGNES

The National Association of Municipalities in the Republic of Bulgaria (NAMRB) has demanded that 2-3% of the personal income tax be redirected to local authorities.

Todor Popov, Chair of NAMRB, explained Thursday that the measure would bring an additional BGN 500 – 600 M into the budget of the local authorities.

Popov, as cited by dnevnik.bg, explained that the proposal had been discussed by the reinstated Decentralization Council, which was not functioning during the term in office of former Finance Minister Simeon Djankov, adding that it would most probably take effect in 2015.

He noted that the proposal enjoyed the support of Bulgaria's socialist-led coalition government.

Popov told journalists that the percentage of personal income tax to be redirected to municipalities was still being discussed.

Citing analyses of the NAMRB, he argued that the extra resources would double the budgets of over 200 municipalities.

He explained that the principle of distribution of the resources would be reconsidered so as to achieve better balance, adding that the deductions would go to the municipality of permanent address of the taxpayer instead of the municipality where his workplace was.

Popov noted that discussions were underway on redefining a number of state-level activities ad municipal-level activities.

To illustrate his point, he said that the subsidies for social activities from the state budget could be managed by the respective local authorities, adding that the measure could also be applied in the spheres of culture and sports, as the allocations for these activities were currently determined in the central budget.

Popov went on to say that work on determining the methodology for the calculation of the garbage fee had to start in spring.

The NAMRB Chair explained that legal changes stipulated that the principle of calculating garbage fee on the tax assessment of the property had to change as of 2015.

He noted that the new method had not been selected yet, adding that it had to be based on some other parameter such as the waste volume.

Popov also spoke in favor of introducing unified statutory rules for the application, evaluation and the deadlines for public procurement procedures under EU programs.

He pointed out that municipalities coordinated their projects with the respective ministries under the current mechanism, yet financial corrections were often necessary at the end of procedures, placing a burden on municipal budgets.

Popov proposed changes to the appeals procedures before the Commission for Protection of Competition and before courts, stressing that an increase in the fee for filing a complaint would prevent protracted procedures.

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Tags: National Association of Municipalities in the Republic of Bulgaria, NAMRB, personal income tax, garbage fee, decentralization, local authorities, state budget

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