Bogetic, Z., 1997, ‘Bulgaria’, in Fiscal Federalism in Theory and Practice, ed. by T. Minassian, (Washington: International Monetary Fund).
Council of Ministers, 2002, Program for Implementation of the Financial Decentralization Concept for the Period 2002–2005, Bulgaria
Dabla-Norris, E., Martinez-Vazquez, J., and Norregaard, J., 2002, ‘Fiscal Decentralization and Economic Performance: The Case of Russia, Ukraine, and Kazakhstan’, (forthcoming Working Paper of the International Monetary Fund).
De Mello, L., 1999, ‘Fiscal Federalism and Government Size in Transition Economies: The Case of Moldova’, (Working Paper of the International Monetary Fund).
Hewitt, D., 1991, ‘Transfers to Local Government’, Public Expenditure Handbook: A Guide to Public Policy Issues in Developing Countries, ed. by K. Chu and R. Hemming (Washington: International Monetary Fund).
Martinez-Vazquez, J., 1995, ‘Central and Local Government Tax Relations’, Financing Government in the Transition: Bulgaria; The Political Economy of Tax Policies, Tax Bases and Tax Evasion, ed. by Z. Bogetic and A. Hillman (Washington: World Bank).
McCullough, J., 2002, National Policy and Macroeconomic Considerations in Bulgaria’s Fiscal Decentralization Program, (Washington: Research Triangle Institute).
McCullough, J., Spofford, T., Savov, E., and Ivanov, S., 2000, Bulgaria: Comprehensive Municipal Finance and Fiscal Reform Proposal, Research Triangle Institute (under USAID contract to The Urban Institute).
National Audit Office of the Republic of Bulgaria, 2000, Findings of the Audit Conducted in Connection with the Unpaid Bills of Municipalities.
Shah, A., 1994, The Reform of Intergovernmental Fiscal Relations in Developing and Emerging Market Economies, Policy and Research Series No. 23, (Washington: World Bank).
World Bank, 2002, Bulgaria: Public Expenditure Issues and Directions for Reform, Report No. 23979-BUL, (Document of the World Bank).
Prepared by Bozhil Kostov, IMF office in Sofia.
In 2000, Bulgrian municipalities accounted for 21 percent of consolidated government expenditures (up from 17 percent in 1997 and down from 23 percent in 1999).
In fact, the stock of arrears has come down from 11 percent of municipal revenues at end-1999. However, this has been achieved at the expense of additional grants provided by the central government–a practice that does not encourage fiscal discipline.
Extensive technical assistance has been provided in this area under the USAID’s Local Government Initiative Project.
Shared mandates are also a problem for matching expenditure assignment with revenue authority. It has been estimated that municipalities spend more than 90 percent of their budgets for services over which they have very limited control (National Audit Office, May 2000)
The patent tax levied on small businesses is treated as part of the personal income tax share for distribution purposes and is shared in the same percentage.
Based on “Concept and Program for Fiscal Decentralization,” recently adopted by the Council of Ministers.