Paper/Speech Details of Conference Program for the 16th NISPAcee Annual Conference Program Overview V. Working Group on Public Sector Finance and Accounting Author(s) Boris Morozov Louisiana State University Baton Rouge United States Title Property tax in Republic of Moldova – Basis for local autonomy? File Paper files are available only for conference participants, please login first. Presenter Abstract The study of the countries of Central and Eastern Europe has focused mostly on the how to develop a democratic society based on values of private property, market economy, plurality of opinions and freedom of speech. The initial argument was that market mechanisms will facilitate the efficient and effective allocation of resources, compensating for interim distributive inequalities and macroeconomic destabilizations. Although that hypothetically compensatory relationship between efficiency of resource allocation and distribution inequalities and macroeconomic stabilities is yet to be empirically proven, major policy projects aiming to achieve that greater efficiency in resource allocation took form of some sort of decentralization (also referred to as fiscal decentralization) of the central authority. The phenomenon of “fiscal decentralization” has been primary discussion issue among public practitioners and scholars for more than a decade now. The role of local governments in provision of public services and goods has been discussed through the lens of fiscal decentralization. Significant body of knowledge on fiscal decentralization, instruments and strategies of implementation as well as the criteria for evaluation of the degree of a country’s decentralization was developed during last decade. The phenomenon of fiscal decentralization is being actively studied and pursued throughout the world because of benefits associated with it. A properly designed and implemented system for delegation of public responsibilities and authorities creates conditions for better provision of public services and goods. The improvement in service provision could be achieved through movement of government closer towards the population to be serviced. The proximity of governments to its constituents allows for a higher degree of governmental responsiveness to citizens’ needs, which results in better governments’ accountability, citizen’s willingness to pay for these services through their taxes, and hopefully economic development of region. At the same time, successful fiscal decentralization of a state is a function of local governments’ ability to levy and collect own revenues, i.e. sub-national should not be dependent upon the center for all revenues. Such local activity increases the visibility of choices made by elected and appointed public officials, and accountability increases pari passu with visibility. Therefore, local governments should be able to set and collect at least a part of their taxes and revenues. Economic literature suggests that identification of the appropriate tax base should be a function of economic incidence and tax base volatility. The property tax satisfies both of these requirements since it is relatively stable and the tax burden is supposedly on these citizens who are financially better off. In this way, proper administration of local real estate taxes is of direct and positive influence on success of decentralization efforts in a country. This exploratory and qualitative study will evaluate the existing practices in the area of immobile property taxation in Republic of Moldova. It will describe the criteria for evaluation, current achievements, and major problem areas (e.g. property assessment for taxation purposes, taxation mechanisms, local tax base and real estate valuation, etc). Finally, this manuscript will provide some practice–oriented suggestions and recommendations on achievement of appropriate level of decentralization in the country under discussion.