PROPERTY TAXATION IN NORTH MACEDONIA

Abstract

Property taxes are one of the most essential taxes for the local authorities in any
country. They are the main source for providing the municipality with finance in order
to provide public goods and services. The last decade of unstable fiscal policy induced
the necessity to readdress the role and the potential for reform or modernization of
these sort of taxes. Considering the ever-growing thirst for larger expenses and going
forward with fiscal decentralization process in North Macedonia, the local governments
are confronted with the need to secure more finances. Therefore, the goal is to examine
the current structure of property taxes in North Macedonia, compare them to some
countries in Europe and finally to propose actions regarding some changes in local tax
policy in order to improve the tax collection. Those changes should follow the growing
inequalities among citizens in the country. In most developed countries the volume of
property tax involves real estate and personal property, like vehicles, movable
household items. Even some countries take into consideration the ownership of real
estate in other countries around the world in order to really detect the wealth of some
people. The last reaction from the central government in order to overcome the gap in
local budgets (the government borrowed 50.000.000 euros) was with intention to reduce
the level of debt in most of the local municipalities and to secure their everyday
functioning. Since then there are a lot of discussions in direction of better functioning
of local governments through better collection of local revenues.