Skopje, 24 October 2023 (MIA) – Finance Minister Fatmir Besimi and the mayors Bilal Kasami, Mile Petkov and Blerim Sejdiu signed on Tuesday the agreements for the use of the structural bonds issued by the Ministry of Finance aimed at helping the municipalities of Tetovo, Vinica and Zhelino meet their obligations and strengthen their financial capacities.

The structural bonds, according to the Ministry of Finance, are new financial instrument which is introduced with the Law on Financing Local Self-government Units and gives the municipalities the opportunity to use them to settle due and unpaid obligations.

According to the Ministry, the 10-year bonds are set to enable the municipalities to consolidate their budgets and focus on their development. They will repay the bonds in 10-year equal instalments. The bonds can also be traded on the secondary market of the stock exchange.

“All of this is in the direction of ensuring their financial stability and providing quality services. The municipalities of Tetovo, Vinica and Zhelino were the municipalities that took advantage of this one-time opportunity from the Law and submitted a request within the legally established deadline for the issuance of a structural bond and thereby provide funds for the payment of obligations and commit to their development,” Besimi said.

Ministry of Finance issued its first structural bond worth a total of Mden 275 million, of which some Mden 250.2 million of the funding will go to the municipality of Tetovo, Mden 21.7 million will be provided to Zhelino and the remaining Mden 2.5 million is intended for Vinica.

“The issuing of the structural bonds is a part of the planned reform for the promotion of fiscal decentralization, and a part of the broader reform for public finance management,” said the Finance Ministry in a press release.

In addition, with the amendments to the Law on Financing of Local Self-Government Units, more funds were provided by increasing transfers from the central budget to municipalities based on personal income tax from 3% to 6% and based on VAT from 4.5% to 6%.

Photo: Ministry of Finance