Municipalities formed after the local government reform mergers can impose waste collection fee increases of between 14% and 34% to harmonise charges across previously separate districts, according to legislation currently under parliamentary review.
The bill, being discussed today by the House Interior Committee, specifically addresses the financial challenges created by municipal amalgamations where different waste collection fee structures previously existed.
Key provisions in the proposed legislation
“Beginning from 1st July 2024 onwards, the increase imposed on waste fees may exceed 14% but must remain below 35% of the previous year’s fees, only in cases where this is necessary for harmonisation purposes within the same municipality,” the draft legislation states.
The bill contains no provisions for potential fee reductions.
Similar harmonisation measures apply to general municipal taxes, with potential increases ranging from 10% to 35%. The legislation states that municipal councils may “determine the tax percentage so that the total increase may exceed 10% but in all cases not exceed 35% of the total amount of the imposed tax during the immediately preceding year.”
District Authorities gain financial independence
In a related development, the bill also modifies the financial relationship between municipalities and the newly formed District Organisations of Local Government (DOLG).
The DOLGs will no longer return 60% of development permit fees (planning and building permits) to municipalities as previously planned. This change reflects the DOLGs’ assumption of payroll responsibilities for municipal employees seconded to these new district-level authorities.
The legislation indicates that municipalities will need to find alternative revenue sources to compensate for this funding reduction.
According to the draft law, these arrangements aim to “further improve the legislative framework governing the operation and financial independence and robustness of the newly established District Authorities, through the regulation of financial and technical issues and the deletion of the 60% return of licensing fees to the respective local authorities.”
The bill also grants District Authority Councils delegation powers, addresses pending judicial procedures, enables fee collection for green point management, and clarifies transitional provisions, completing a comprehensive overhaul of local government financing across Cyprus.
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