SKGO Exchange 3

Local Government Revenues in the Context of the Economic Crisis

Standing Conference of Towns and Municipalities (SCTM), within the EU founded Exchange 3 Programme, and in the cooperation with the GTZ Project "Support to the Reform of the Intergovernmental Finance System in Serbia", and USAID Municipal Economic Growth Program (MEGA) organized the Conference "The Moment of Decision - Local Government Revenues in the Context of the Economic Crisis", which took place on 18 October 2010.

The aim of the Conference was to provide insight into the current state of local governments' financing, with particular reference to LG own revenues, and recommendations for the forthcoming period. The key topics of the conference were related to current process of fiscal decentralization and its actual results, reform of the property tax system, reform of the wage system, and the issue of intergovernmental transfers.

Mrs. Diana Dragutinovic, Minister of Finance of the RS, who is recently appointed to the position of the President of Intergovernmental Finance Commission, addressed the participants. Mrs. Dragutinovic accented the importance of property tax reform in Serbia and pointed out disadvantages of the current property tax system, as well as disadvantages of formula for transfer calculation. She also underlined crucial importance of the new law on fiscal responsibility, and importance of the new role of Intergovernmental Finance Commission (IFC). Mrs. Dragutinovic also underlined that next year more funds will be allocated to the local budgets.

Beside Mrs. Dragutinovic, conference participants were also addressed by Mr. Adriano Martins, Deputy Ambassador of the Delegation of the European Union in Serbia; Mr. Cristoph Eichen, First Secretary for Economic Cooperation, German Embassy in Serbia; Mr. Michael Metzler, Director (Acting) Economic Growth Office, USAID Serbia; Mr. Uwe Stumpf, Director of the German Organization for Technical Cooperation (GTZ) in Serbia.

Conference was organized for representatives of towns and municipalities - for mayors, heads of finance departments and heads of local tax administrations who responded in the impressive number (234 of them attended the conference). The agenda of the conference consisted of current issues in the area of local finance such as: income tax, intergovernmental transfers, property tax and other forms of local revenues, the experiences of local governments, proposals for the reform of property taxes etc.