Reform of the finances of local government units – islocal government facing a revolution?

<ns3:p>The publication aims to present the author’s view on plans to reform the finances of municipal units. The reformsof the previous government were met with protests from many local governments, especially the wealthier ones.The current government proposes a departure from these changes and proposes its own changes, which in itsopinion strengthen the autonomy and finances of municipal units. The main demands implemented by the draftnew act are to establish a permanent share of municipal units in income taxes calculated on income, change thetypes of general subsidies, abolish the minimum threshold for subsidy eligibility, and deduct the contribution tosubsidies from the municipal shares from taxes instead of making payments. An important issue is also to increasethe share of the local government finance sector in public finances by actually increasing its share in taxes. Itseems, however, that the final assessment of the reform will require knowledge of the government’s next stepson issues not covered in the act, such as the issue of targeted subsidies.</ns3:p>