Borrowing as a form of financing local government in Republic of Macedonia
Borrowing as a form of financing local government in Republic of Macedonia

Summary/Abstract: Financing the local government in Republic of Macedonia can be achieved through various forms of financing sources. According to the newly made legal framework local governments can be financed trough: Ø taxes ( property tax, inheritance and gift tax, income tax, value added tax and sales tax n real estate) Ø local charges Ø local fees Ø property revenues Ø transfers from central government Ø borrowing It is primary goal for every unit of local government to try and provide all it’s necessary finance from revenues, taxes, local fees and local charges i.e. from own sources. But not always the local government can cover all it’s expenditures with own sources, especially when it comes to capital investment which also concern the higher level of governance and are to expensive and timely spread for the local governance to finance them by itself. For this kind of financing local governments can’t turn only to their own resources, they will have to find other sources in the transfers from central government and borrowing. Transfers from central government are usually used for target capital projects that are part of the central government strategy. But what about the capital projects of the local government, or simply what if the local governments in Republic of Macedonia can’t cover their expenses with their own sources? That is where borrowing as a possibility of local governments for financing from external sources comes in. This article elaborates borrowing as a possibility of the local governments of Macedonia to gain financial assets necessary for their development or day to day provision of public goods and services for the municipality residents.

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