Macedonia has achieved significant progress in the fiscal decentralization, seen through an increase in the share of local taxes in the GDP from 1 percent in 2006 to 1.5 percent in 2011. With regards to the decentralization level, Macedonia can be compared to other EU states, i.e. the country has achieved international decentralization standards, said participants at conference "Social Services for Support of Social Development and Cohesion", organized by the Ministry of Finance and UNDP.

"Revenues of municipalities have quadrupled compared to 2005, when the fiscal decentralization process was launched. Tax revenues in the municipality's jurisdiction have doubled", said Vice Premier and Finance Minister Zoran Stavreski in the conference address.

The FinMin noted the possibility for access at the capital market through issuing of municipal bonds as an important aspect for funding of investment projects.

"Local revenue independence can increase through modernization of the tax policy and administration with regards to property taxes and communal taxes, taking into account these revenues should become an increasingly important source of municipal income", stressed Stavreski.

He said many challenges lie ahead for the Government and the local authorities, such as registering of all properties in municipalities.

"Effect on the local economic development depends from the municipalities' capability to pass planning documents, thus improving the management of construction land, which can be a secure source of revenues in the future. This should be one of the future priorities. Moreover, the possibility of improving local services though the form of public-private partnership is still not sufficiently utilized", emphasized Stavreski.

Koce Trajanovski, Skopje Mayor and chairman of the Association of Local Self-Government Units (ZELS), said all municipalities have appropriate capacities to provide services for citizens, adding there is still unequal development of municipalities in certain regions.

"Municipalities have same competences, regardless of their size or capacity. We are working on changes in the fiscal capacity in order to implement decentralized jurisdictions, followed by appropriate distribution of funds, in order to eliminate nationwide disparities", said Trajanovski.

Jorge Martinez-Vasquez, director of Georgia State University International Center for Public Policy, said Macedonia has made impressive progress in the field of decentralization, but not at the same pace in all dimensions.

"This is a good time to evaluate the entire process and undertake reform steps towards equalizing performances", said Martinez-Vasquez.