site.btaInstitute for Market Economics Study: 7 out of 21 Municipalities Have a Positive Fiscal Stance in 2023

A study by the Institute for Market Economics (IME) indicated that 7 out of 21 municipalities had a positive fiscal stance in 2023, while the municipality of Nessebar had a significant deficit relative to the population (BGN 684), as did, to a certain extent, the municipality of Vidin (BGN 304). The IME study covered 21 municipalities in the country.

The study, published on Wednesday, presented a methodology developed by the IME for assessing municipal budgets and applied to a selected group of municipalities. The aim was to support the analysis of the budget process and the assessment of the budget results of the municipalities. The methodology is based on similar documents in international budget practice, adapted to the conditions in this country and was based on information provided by municipalities or freely available on their websites and those of ministries, IME explained.

The analysis also noted the average amount of municipal debt per capita as BGN 229, but the differences between individual municipalities in the country were significant.

Municipalities such as Vratsa (BGN 422) and Varna (BGN 519) stand out with high values ​​of debt per capita, related to large infrastructure projects that require significant investments, but also increase the financial burden on future budgets and potentially on the need to expand tax revenues. Municipalities with lower values ​​of debt per capita such as Targovishte (BGN 55) and Kazanlak (BGN 71) managed obligations more effectively and minimized the financial burden on the population.

The study indicates that many municipalities achieve satisfactory results in terms of tax collection. Municipalities such as Kozloduy (96.4%) and Rakovski (92.68%) demonstrated effective management of their tax system, collecting almost the entire amount of the tax, with an average collection rate for the country of 79.1%, the study reported. IME noted that these high collection rates show that local authorities are actively working to optimize tax processes and encourage citizens to pay their taxes. An increase in tax collection was reported in Vidin and Nessebar.

The results of the budget execution show that despite the large differences between the included municipalities, each of them had both strong positions on certain indicators, as well as areas of possible improvement, such as the collection of local expenditures and the management of municipal debt, IME noted.