Development of Local Municipality Taxes and Principles of Fiscal Policy in Lithuania
Gediminas Davulis, Kęstutis Peleckis, Neringa Slavinskaitė

Abstract
The article deals with the possibility of developing fiscal decentralization and its main part – the institute of local taxes in Lithuania. General principles of tax distribution on the state and local government levels are discussed. The experience of contemporary democratic states and current situation of Lithuania in the sphere of local taxes is considered. The budget’s structure of Lithuanian municipalities from the point of view of fiscal decentralization is analyzed. The analysis showed, that non-tax income, which can be mostly influenced by local governments and local taxes comprises but an insignificant share of all local governments income and they significance are not great. The volume of state subsidies for budgets of local authorities comprises more than a half of their total revenues. This fact testifies rather a low level of fiscal decentralization in the country. The comparative analysis budget structures of the Vilnius and other capitals of EU countries showed that situation in Vilnius, Dublin, Riga and Tallinn municipalities is similar and characterizes by low degree of financial independence of municipalities. On the other hand budget structure of Paris and Warsaw municipalities indicates a high level of fiscal decentralization, which is much higher than that of the Vilnius municipality. The means are proposed that will enable us to develop the institute of local taxes up to the European level.

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