The municipalities need more own resources and a share of revenues from personal income taxation
IME analysis shows opportunities for expanding municipalities' financial autonomy. The budget expenditures of municipalities in Bulgaria will reach BGN 14.7 billion in 2024. The significant growth in local spending since the pandemic has been driven almost entirely by transfers from central government. Over the last 10 years, there has been a serious decline in the financial autonomy of municipalities, as measured by the share of own tax and non-tax revenues in total local spending. The share of own revenues of municipalities in Bulgaria has shrunk from over 40% in 2015-2017 to below 25% in 2024.