LOCAL TAX POLICY IN BULGARIAN MUNICIPALITIES AND CROATIAN LARGE CITIES

Abstract

This article presents a comparative analysis of local tax policies in the 24 largest municipalities in Bulgaria and the 24 “large cities” in Croatia (those with more than 30,000 inhabitants or serving as county seats), with a focus on property-related taxes and other significant sources of local revenue. Since 2007, Bulgarian municipalities have had the authority to set tax rates within centrally defined minimum and maximum thresholds. In contrast, Croatian local self-government units operate under a national legislative framework that allows them to adjust tax rates and introduce various local fees. The study explores three key questions: (i) to what extent local tax policy features prominently on municipal political agendas; (ii) the relative influence of mayors versus municipal or city councils in shaping tax policy; and (iii) the extent to which municipalities utilise maximum allowable tax rates compared to adopting alternative revenue-enhancing measures. The findings offer empirical evidence and comparative insights, highlighting both the strengths and limitations of current local tax policy practices in Bulgaria and Croatia. The article concludes with policy recommendations to improve the effectiveness and autonomy of local fiscal governance in both countries.