4.  The economic bases of the municipal system in the republic of Azerbaijan

The importance of the municipal management and their base to the democratic principles in Azerbaijan, commented on appeal of the national leader Heydar Aliyev to people dated December 12, 1999 in relation with municipal election.

The municipals are the elective local management bodies consisting of the mu- nicipal members, formed according to the Constitution of the Republic of Azerbaijan the Law of the Republic of Azerbaijan on “The municipal election” and their regu- lation. The municipal bodies organized according to the regulation of municipal and the authority are ofliged to solve solution of the locally important problems. The municipal and their bodies not included to the bodies of the state governmental sys- tem. The implementation of the local management is not issued by state bodies and authorized entities.

It is noted in article 33, of the Law of the Republic of Azerbaijan “On the status of the municipal” that, the population defines the terms and privatization of the mu- nicipal property directly and municipal freely [4]. The resources included from the privatization of the premises of the municipal are entered completely to the local budget. The privatization of the municipal property increases the finance possibility of the local management bodies in one part and implement case for independence of the pulled profits for the activation of the companies and objects worked with less return and loss.

By the aim of the creation and strengthening of the economic base of the local management bodies, the local management bodies and their authorized employees have to form the process of privatization of the property. They have to inform the tax body on repayment of the resources obtained from the privatized premises and on the resource included to the local budget.

In accordance with Law of the Republic of Azerbaijan “On status of the munic- ipal”, define the right of definition of the use terms of lands being inside the limit of municipal and on interest of municipal of the local people [4]. The lands being one of the types of the municipal property are the source of the strengthening the eco- nomic base. The financial-budget activity of the local management bodies regulated by the decision of the Cabinet of the Ministry and the decrees of the President of the Republic of Azerbaijan.

The general rule of the economic and financial base of implementation of the local management was defined by the municipal regulation. The local finance is di- vided into 2 groups – budget resources and resources extra-budgetary. The division of resources to budget and resources extra-budgetary accurates the weight in the fi- nancial resources of the municipal organization.

Being independent, the municipal budget possessing its return resources is pro- vided by the right of the use of it and issue of decree of the local management bodies.

The profits of the local budget is formed tax account and non-tax repayment.

In accordance with the article 40 of Law of the Republic of Azerbaijan “On the status of municipal” tax, grants, subventions, transfer repayment deducted from the profit if the organization, companies, resources, municipal administration included from privatization of the municipal property, lease of the municipal property, local lottery and advertizing form to the local budget [4].

Constitution of the Republic of Azerbaijan defines the right of free define of tax and repayment of municipal (article 144, item 4). The limit of the local tax and repay- ment is defined by municipal according to the laws of Republic of Azerbaijan. [4].

The article 45 of Law of Republic of Azerbaijan “On the status of the municipal” define the right of municipal to create purposely extra-budgetary funds defined by the rule and terms of legislation of Azerbaijan Republic [4].

The source forms the second part of the local budget. The following expenses in- cluded to the source of the budget [5, 11, 13]:

• Preserve profits of the management returns of municipal, social, welfare, re- sidential, cultural and sport objectives, at the same time street, yard and gar- dens being under the general use of the people;
• Divided necessary resources implemented for the different state authority;
• Returns in connection with the loan and repayment of advance formed by the local management bodies;
• Returns for the finance of social defense, social and economic development, at the same time ecological

By the aim of abbreviation the lack in the local budget, it is possible to limit the defined.

In the process of execution of the municipal budget, the abbreviation mechanism applied non-clearing of the last limit of the shortage. In accordance with the article 12 of t law of Republic of Azerbaijan , the abbreviation of the source consist of de- crease of the source on all article of the budget, excluding the previous articles [5, 11, 12, 13].

The finance of the municipal is formed by budget process. The budget process define the activity of the local management by compile, apply, execution, at the same time budget, legal norms together with the execution of their account.

Therefore, the form of the finance activity of the local management and financial resources participated as the main resources of the locally significant problem, being the main element of the economic bases of the local management.