Since 2006, the Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ), on behalf of the German Federal Ministry for Economic Cooperation and Development, has been supporting the Serbian Government in their reform of the intergovernmental finance system. Support was especially needed on the implementation of the Law on Local Self-Government Finance and the ensuing transfer of the property tax from the central to the local level.
The objective of the project is to put municipal finances onto a reliable and more independent basis.
Taking into account hat financial relations within a country are subject to a constant process of adjustment, the project aims to establish a sustainable culture of discussion and negotiation between the representatives of national and local authorities.
To reach its objectives, the project is active on three levels:
1. On the national level, relevant ministries and the Parliament are supported in creating an appropriate legal framework by providing technical advice and impact analyses. Recommendations for the devolution of further revenue sources are developed. Activities take place to strengthen the Intergovernmental Finance Commission as the main negotiation mechanism on local government finance between local and central level.
2. On the local level, local tax administrations are supported in order to enable them to further develop their work. Capacities of local tax administrations are improved through trainings organized together with the Central Tax Administration as well as on-the-job trainings and seminars organized by more advanced local tax administrations. To increase local revenues and enhance taxpayer compliance, the project intensively supports the updating of property tax databases as well as local media campaign for taxpayers education.
Within the SCTM, a network of local tax administrations has been established. It enables all local tax administrations to share their experiences and learn from their peers, to develop synergies and lobby for their interests. At regional network meetings, best practices are presented and technical issues are discussed, and at annual events relevant tax policy issues are discussed.
3. The Standing Conference of Towns and Municipalities, as the intermediary between the local and the national level, plays an important role in the process of fiscal decentralisation. To fulfil this role, the project has supported building up essential know-how within the SCTM. By establishing the network of local tax administrations, the SCTM has gained direct access to the expertise and know-how of the local tax administrations while at the same time being able reach all local tax administrations easily to disseminate information and best practices.
The project is implemented in the period from 01/2006 to 12/2012.