Public Finance for Development in North Macedonia
North Macedonia became a programme partner country in 2018. The demand has been centred on problem solving related to the informal economy, the fight against tax evasion and tax fraud, fiscal decentralization and fiscal efficiency, and the procurement of public goods and services.
ACTIVITIES: The technical assistance programme is fully aligned with the measures and activities of the 2018-2020 PFM Reform Programme, and the Ministry of Finance of North Macedonia’s long-term vision regarding public finance management. The activities focus on reinforcing the capacities of the Ministry of Finance and the Public Revenue Office (at the level of local self-governments as well) in the following areas:
- Reducing informal economy through:
- Setting up and streamlining the transfer pricing system;
- Exchange of information for tax purposes;
- Improvement of administration property taxes.
- Strengthening the Fiscal Autonomy and Revenue Mobilization Capacities of the Local Self-Government Units (fiscal decentralization)
- Strengthening Fiscal Efficiency and Discipline in Providing Public Goods and Services.
Participation in the Public Finance for Development programme strengthened Public Revenue Office’s capacities to introduce international taxation as well as the knowledge in the transfer pricing segment. The expert guidance from the Financial Administration of the Slovak Republic at the organized on-job trainings improved tax officials’ acquaintance of international practices and we learned from Slovak experience in the transfer pricing regulation, conducting financial risk analysis, and transfer pricing audit.
The State Audit Office successfully enhanced the state audit capacities under the Public Finance for Development Programme. We conducted five training courses through which the SAO employees exchanged knowledge and experience with leading international and local experts. They significantly improved state auditors’ skills and capacities and are now applied in ensuring high-quality and transparent audit reports, available to all the stakeholders. Insights transferred by the Slovak experts are particularly significant, due to country’s strategic commitment for EU membership.
In cooperation with UNDP and under the Public Finance for Development programme, the Ministry of Finance of North Macedonia has over the past three years improved its operations in fiscal decentralization and tax policy, transfers from the central budget, audit and accounting, informal economy and cash flow reduction. Together, we conducted a study identifying the leading factors behind the informal economy, followed by an awareness raising campaign on the “grey economy” consequences. The ministry’s staff greatly valued the trainings and study visits, which effectively conveyed Slovakia’s expertise in automatic data exchange for tax purposes.