Local income tax paid by residents, real estate tax and a share of corporate tax account for almost half of all municipal revenues. Each local authority decides independently on its income tax rate. The average local tax rate is 19.17 per cent of taxable income.
Fees and charges account for about a quarter of municipal revenues. Most of the customer charges are collected for services such as water supply, waste disposal, power supply and public transport. Just under one tenth of social welfare and health expenditure is covered through customer and patient charges. Basic education is free.
Central government grants local authorities financial assistance in exchange for a wide range of statutory services. The central government transfer system evens out financial inequalities between local authorities and ensures equal access to services throughout the country. Central government transfers account for less than one-fifth of all municipal revenues.