Submitted proposals to expand the financial capacity of municipalities

The coalition of seven non-governmental organizations Alliance for Municipal Development (BINA) on Thursday organized a "round table" with the participation of stakeholders, which discussed the proposal to increase the financial capacity of local self-government in Azerbaijan.

Contrary to the recommendations of the Congress of Local and Regional Authorities of the Council of Europe, Azerbaijan has still not entitled municipalities full and exclusive power to exercise local control. Accordingly not developed their financial support, said the coordinator of BINA Abil Bayramov .

According to him, the political power is not going to make radical reform of local authorities and therefore, the coalition decided to go the way of Public Advocacy municipal development "within the possible." The first step in this direction could be the introduction of a mutual tax system to generate sustainable financial basis of municipalities, according to BINA, while adding that the complete solution of the question is necessary to adopt the concept and program development of the institution of local government.

Suggestions for increasing the financial capacity of municipalities experts prepared the public association Promoting Economic Initiatives (PEI). Deputy chairman of the society Rovshan Agayev presented proposals for mutual use in the country of the tax system. According to him, in different countries they use different forms of this system. But in any case, this system is aimed at ensuring effective financial base of municipalities that would satisfy the resolution of issues relating to their powers. In PEI they considered suitable for the use of two of 9 taxes in Azerbaijan - profit tax and income tax on individuals. According to specialists of PEI, in the case of approval of the proposal on the separation between the municipalities of the 10% of the taxes collected in a centralized manner, they will have an additional source of financing in the amount of AZN 150 million. In 2013, the revenues of all the 1,716 municipalities in the country amounted to three times less than this amount (47 million manat).

The PEI expert Samir Aliyev presented the "round table" the proposal to supplement the list of municipal taxes to property tax entities that can replenish the municipal treasury of at least 115 million manat a year. On this type of tax on individuals, municipalities collected last year 4.3 million manat, which is 0.6 million manat more than in the previous year. This is a tiny amount when you consider that each entity of the tax accounts for only 2.2 manat. According to the expert of PEI, the problem is not only in the collection of the tax , but also legal barriers : under the Tax Code , the property tax on individuals charged in compliance with the inventory value , which should determine the service state registration of immovable property. This state agency practically does not carry out these duties, thus depriving municipalities of financial sources. -08C-
 

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