Improving Public expenditure, Accountability and Tax administration in North Macedonia (IMPACT)

pipeline

The proposed Program-for-Results (PforR) operation aims to support North Macedonia’s public financial management (PFM), tax administration, and state aid reforms. It is the first PforR in the country and is designed to improve public spending efficiency, transparency, and revenue administration effectiveness. North Macedonia has made progress in PFM reforms but faces challenges due to the pandemic, energy crisis, and fiscal pressures. The fiscal deficit and the public debt increased, with persistent expenditure arrears and weak fiscal discipline. Climate change poses significant risks, requiring large-scale adaptation investments. The government adopted a new Organic Budget Law (OBL) in 2022 to address systemic weaknesses in budgeting, accounting, and investment management. The PforR will support key institutional reforms included in the Public Financial Management Reform Plan 2025-2028, the Public Revenue Office Reform Plan and State Aid reforms to consolidate and digitalize state aid processes.