As of 2008, the municipal councils may be allowed to set the rates of local taxes and fees, BTA reports. This is envisaged in a bill amending and supplementing the Local Taxes and Fees Act discussed Tuesday by the National Council on Tripartite Cooperation (government, employers, trade unions), the government information service said in a press release.

Presided over by Emel Etem, Deputy Prime Minister and Disaster Management Policy Minister, the partners considered amendments to another four acts - on taxation of personal incomes, on corporate income tax, on excise duties and tax warehouses, and on value added tax.

Under the local taxes bill, the 2007 tax rates will become the minimum level of tax rates applicable as of the beginning of 2008. The maximum level of taxes will be up to two-fold higher. This group includes the taxes imposed on immovable property, donations, property acquisition through purchase and inheritance. As an exception, automobile tax may be made up to three-fold higher. No changes could be made in local tax rates throughout the year.

According to the local taxes bill, in 2008 license tax will be a local one. The tax regime operating until the end of 2007 will be preserved; license taxes and the tax concessions provided for in the Personal Income Tax Act will continue to apply; craftsmen subject to license tax will be exempt from income tax.

The license tax rates will be fixed by the municipal councils within the limits envisaged in an attachment to the Local Taxes and Fees Act. The lowest rate will be the current lowest level in this country, and the maximum one - the highest in the country (applicable in Zone 1 of the capital).

The activities subject to license tax will not be grouped and zoned by law; this will be done by the municipal councils.

The local tax rates applicable in 2008 will have to be set by the municipal councils by February 29; failing to do so, the respective municipality will have to charge the minimum rate of local license tax.

A flat tax rate of 10 percent,will be charged on personal incomes as of next year. The deductibles recognized in the operative law will continue to apply - 10 from the amount received for participation in managerial and controlling bodies of enterprises; 25 per cent from the incomes of self-employed persons and persons working under contracts for personal services; 40 per cent for incomes derived from the sale of non-processed products of agriculture, forestry, the hunting and fishery industries, copyrights, licenses, including incomes from the sale of inventions, works of science, culture and art, artistic performances and crafts which are not subject to license tax.

The tax for sole proprietors will be 15 per cent - the standard rate of 10 per cent plus 5 per cent.

The percentage of advance tax payments will be reduced from 15 to 10 per cent for natural persons; the rate for sole proprietors will be 15 per cent. There will be no tax concessions for donations and children.

The rate of corporate tax will be 10 per cent, as before, plus dividend tax, which is reduced from 7 to 5 per cent.