The government increases the budget for municipalities - 47.3 billion lek transfers. The "unconditional" exceeds by 6.5%
Municipalities will have a budget approximately 9% higher than the expected local budget for 2025.
Unconditional general and sectoral transfers constitute an important source for financing local government functions. During 2026, local government will benefit from a total of 47.3 billion lek in the form of transfers, of which 27.8 billion lek or 59% is unconditional general transfer distributed through the formula, 14 billion lek or 30% is in the form of unconditional sectoral transfer for financing functions transferred to the local level, and 5.5 billion lek or 11% is in the form of sectoral transfer for salary increases.
In the 2026 draft budget, the government anticipates an increase in the unconditional transfer by 1.6 billion lek compared to 2026.
While the unconditional transfer for each municipality in 2026 will increase on average by around 6.5% and for regions by around 4.1% compared to the previous year.
The performance grant will be in the amount of 200 million lek, with the aim of encouraging municipalities to improve their performance in governance, better manage local public finances and increase transparency.
The draft budget foresees that the reform initiated by the government in the property tax will continue to be reflected in the increase in local government revenues. In the 2026 budget, the property tax is projected at 10 billion lek and compared to 2025, about 1.4 billion lek more revenue for local self-government units.
Foreign financing is foreseen in the amount of 1.5 billion lek, for the implementation of projects with a full treasury scheme by local self-government units.
The main focus in the 2026 budget for the Ministry of Finance will be the continuation of the implementation of the financial management process at the local level in order to consolidate the fiscal decentralization of local self-government units.
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