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Extra resources for Fiscal Design Surveys Across Levels of Government

Sample text

Expenditure Is there clear assignment of expenditure responsibilities across levels of government? What is an appropriate size of unit for the cost-efficient operation of subnational government services? Macroeconomic control of local governments – Budget co-operation (expenditure) between central and subnational levels. Main characteristics of the instruments for the central control of expenditure Institutions and procedures for expenditure control. A summary of recent reforms of central-local relations.

First, it is the wage tax, which was distributed among municipalities according the district collection. Municipality, in which employers’ office was registered , received 10% of the collected amount, 20% was distributed according the number of citizens in each municipality within a given district, and the rest was assigned to the central government. The unincorporated income tax yield was allocated to the municipality, in which the particular entrepreneur had his permanent home address. This above described system led to growing disparities among municipalities of different size and location.

In this case local government also administers this revenue source. The law sets the list of local fees and their upper limits. Some of local fees are planned to be transmitted into local taxes. The fee on operated gambling machines, on recreational units and the fee on use of public space are examples of local fees. The system of central government grant consists of mainly operating subsidies, which are decided each year when preparing the central budget. They do not take into account the revenue level of any municipality as they are calculated as a certain amount per pupil in pre-school facilities and primary schools, per bed in social care facilities, as a contribution to the tasks of state administration provided by local government and so on.

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