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"Amendments to formula on equalization transfer reviewed at the meeting with self-governmental entities"

08.11.18 14:38

The meeting with the Mayors of Municipalities and chairmen of Sakrebulos was conducted in the process of elaboration of the strategy on decentralization. Deputy Minister of Regional Development and Infrastructure of Georgia Mzia Giorgobiani and Deputy Finance Minister Giorgi Kakauridze familiarized the representatives of the Municipality with the changes to be made from financial decentralization standpoint – amendment to the formula for equalization transfer.

As per the initiative by the Ministry of Regional Development and Infrastructure of Georgia (MRDI), meetings of working teams are conducted from time to time. Various interested parties connected with the strategy on decentralization, are involved in that meetings. Within decentralization the great part of competences and resources will be delivered from central authority to the local one and that process will be executed stage by stage, upon which the most part of economic and social issues will be resolved on site. 

“This time the meeting was held with the representatives of local self-governmental entity. Within the context of decentralization, Deputy Finance Minister acquainted them with the amendment to the formula for equalization transfer. The referenced formula was reviewed by us in details. There are some questions from the side of Municipalities, as well as from each executing body on how the referenced funds shall be transferred to the referenced direction on the level of Municipalities” – Mzia Giorgobiani stated. 

“It was really considerable and interesting meeting pertaining to changing of the formula for equalization transfer, as well as changing of attitudes. At the Municipalities, e.g. at Dedoplistskaro Municipality, annual equalization transfer was being decreased in parallel with its revenue increase, causing somehow its discouragement. The present attitudes and amendments represents the step forward. It is more evident on based on which principles the distribution will be made” – Dedoplistskaro Mayor Nikoloz Janiashvili declared. 

The meeting concerned also the steps that were made from the point of fiscal decentralization that are determined under the budget for 2019. The aim of the strategy on decentralization is significant improvement of the system of financing for Municipalities. 

One of the most important budgetary revenues of the self-governmental entity is the equalization transfer. The objective of the equalization transfer is equalization of financial resources for execution of authorization rights of various local self-governmental bodies.
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