Decentralization reform after territorial division
12/09/2014

The majority considers the start of the decentralization reform a kept promise, and now they have started the meetings about the most difficult and most important part, the fiscal decentralization.

In presence of the Association of Municipalities and Communes from both the left and the right wings, today were presented the two platforms, one of which comes from USAID and the Ministry of Finance and divides the country in 61 Municipalities, from 385 units that have been so far.

6 billion ALL will be saved from this reduction, money will be given to the local governments for investments, according to the Minister of Finances, Shkelqim Cani. The local governments will have other revenues from the tax reforms, which are expected to affect even the national ones.

“The most affective tax is that on wealth, of which not even half is collected. We are seeing to create a reform for this tax. We think that very soon we will create a fiscal cadaster. Very soon we will realize it, maybe by 2015. Whenever it will happen, we must progress quickly with it. The fiscal package also requires reviews. It might affect 2015. We also want to review the mining Royalty Tax”, Cani declared.

The promises of Minister Cani have satisfied even one of the biggest supporters of the local government, Bashkim Fino.

“If these reforms will be realized within 2015, there will be big revenues and the 2.1% growth of the GDP will turn to 3% very soon, and even 4 or later 6, because this gives independence to the local governments. The citizens’ requests tomorrow will not go to the Minister of Finances or the Local Government, but will go to the Mayor and Municipal Council who have been elected directly to serve, clean and invest”, Fino declared.

The decentralization will be led by the Minister of Local Government, a process that will be followed by the planning of a new integral law for the fiscal decentralization. Minister Cuci declared that these mechanisms will be discussed.

“There are some mechanisms that are related to the fiscal model, with the inclusion of taxes and their national division. This includes the concept for changing the administration of the revenue collection. This is a system of rules of instruments that increases the absolute and relative weight of the local government revenues in relation with the GDP. We are inheriting a very low GDP growth, the lowest in the region. We found it 2.1% in 2013, and we brought it up to 2.4% in 2014. We plan to raise it even more in the future”, Minister Cuci declared.