In recent years, the situation in Molodva regarding local public funds has continued to evolve and steps are being taken to make the management of public funds more effective. This was stated by Sergiu Pușcuța, Deputy Prime Minister and Minister of Finance, during a meeting with rapporteurs from the Council of Europe’s Congress of Local and Regional Authorities who are on a post-monitoring visit to Chisinau, IPN reports.
According to a press release from the Moldovan Congress of Local Public Authorities, Sergiu Pușcuța considers as an achievement that in recent years the way of forming local budgets has been changed, which aims to strengthen the financial autonomy of local authorities. Consequently, there are no longer financial relations of subordination between the administrative-territorial units of first and second level. Political participation in making transfers from the state budget to the local budget has also been minimized.
Pușcuța says it is a real challenge for the Ministry and for the local authorities to estimate the right amounts of money that should be transferred from the general-purpose state budget for the local authorities to run road development and maintenance works.
Another challenge is the implementation of the new law on the unified pay system in the public sector, which locally has led to a 1.6 billion lei increment in expenses. To address this, financial solutions are sought to cover the costs of institutions financed from the local budgets.
Further challenges, according to the minister, are the need to strengthen local financial autonomy, to respect the principle of tax entity, and for the tax burden on the business environment to be properly approached so it does not create conditions of unfair competition in the business sector.
According to Sergiu Pușcuța, for 2020 another important step has been taken in order to increase local financial autonomy, with the plan being that local budgets will get to keep already 100% of the individual income tax collected. Also, it was established that 10% of the corporate income tax will be distributed to the local budgets. The minister concluded that the process of decentralization and strengthening of local autonomy is ongoing.
