12 million euros distributed to 61 municipalities - Local government debts reduced. How will the funds be distributed?
The 61 municipalities in the country will benefit from 1.2 billion lek or about 12 million euros from the state budget, with the aim of paying off arrears.
Through the recently approved normative act, the government allocated an additional 1.2 billion lek to settle the arrears of local self-government units, with the aim of improving financial stability and strengthening fiscal discipline at the local level.
This fund is distributed 60 percent based on the stock of arrears and 40 percent based on the population size used in the unconditional transfer distribution formula for 2025.
According to the review, domestic foreign financing will decrease by 256 million lek due to non-implementation, while revenues from separate taxes transferred to the local budget will increase by 56 million lek, as a result of the higher performance of personal income tax.
Official data from the Ministry of Finance shows that by September 2025, the debts carried by municipalities towards companies that perform public works but also towards citizens are recorded at a value of 2.8 billion lek or 28 million euros.
What is noticeable is that there is a trend of reduction in local government arrears of approximately 800 million lek or 8 million euros compared to the end of June 2025, and also a reduction compared to December 2024, where the stock was recorded at 33 million euros.
The obligation imposed by the government to settle the stock, although it has had positive progress in the last two years, still has occasional fluctuations from one quarter to the next. Even though the goal is to completely eliminate the stock of arrears.
Official data from the Ministry of Finance shows that of the total arrears to businesses and citizens, around 10 million euros are unpaid obligations for public investments, 5 million euros for services, around 2.5 million euros for court decisions and 7 million euros for other expenses.
As for the list of municipalities with the most obligations, the municipality of Kavaja ranks first, leaving behind the Municipality of Tirana. Next is the municipality of Pogradec, followed by the municipalities of Tirana, Dimal and Rrogozhina, leaving behind Vora, Dibra and Lezha.
While at the bottom of the list of municipalities in terms of the value of debts are the municipalities of Vlora, Shkodër, Korçë and Has.
Through the normative act, the value of arrears will be significantly reduced.
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