Debts of Bulgarian Municipalities Down by BGN 50 M in 2011

Bulgarian municipalities are expected to close 2011 with a total of BGN 150 M in unpaid debts and close to BGN 100 M in uncollected revenues, according to Teodora Dacheva, deputy executive director of the National Association of Municipalities in the Republic of Bulgaria (NAMRB).

In Dacheva's words, if the preliminary figures about the municipalities' liabilities by end-2011 are confirmed, this will mean a BGN 50 M drop from previous periods, when the debts persistently amounted to BGN 200 M.

During a regional session of NAMRB held in the northeastern town of Dobrich, Dacheva explained that there were many local administrations in substantial arrears, but the situation was under control due to deferred payment agreements and other measures, meaning that no emergencies such as power supply cuts were expected.

The non-profit association urged Bulgarian municipalities to concentrate efforts on collecting their uncollected taxes and fees owed by natural and legal persons.

NAMRB further advised mayors to be extremely cautious when planning the revenues under the 2012 budget and to stick to pessimistic rather than optimistic forecasts so as not to run into new debts at the end of the year.

In 2012, the association will prepare a new draft Local Taxes and Fees Act and will propose it to the authorities.

The new provisions will aim at providing municipalities with a secure source of revenue like income tax.

NAMRB will also prepare a draft law on local finances which will regulate the relations between the state coffers and the municipalities' budgets on the basis of objective criteria.

Dacheva concluded by reminding that European experts in the sphere had reminded that the system of financing of Bulgarian municipalities was outdated and had to be changed.

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