Abkhazia 31.03.2026 Two cities in Abkhazia to be allowed to manage their own revenues
Two cities within Abkhazia, New Athos and Pitsunda, will now be permitted to independently manage their financial resources. This generous decision by the authorities doesn’t compromise state finances, as both resorts are currently self-sufficient and contribute more revenue to the state budget than they receive in funding. The authorization for Pitsunda and New Athos to establish their budgets occurred during a meeting at the presidential administration.
Previously, before the implementation of the 2015 law “On the fundamentals of the budget system,” these towns possessed their own local budgets. However, their financial status was subsequently diminished, with most tax revenue directed to the republican and district budgets. Pitsunda, located within the Gagra district, and New Athos, under the Gudauta district, received redistributed funds for municipal services and social needs, as approved by district assemblies.
According to Murat Adzhba, chairman of the Pitsunda Assembly, this system restricts the ability of local representatives to promptly address essential municipal and social issues. Residents frequently require multiple layers of referral, leading to delays. Abkhazia plans to ban duty-free shops, citing harm to local retailers and the resulting impact on the republic’s budget.
The assemblies of Pitsunda and New Athos have essentially functioned as advisory bodies without financial power, hindering their ability to resolve urban problems. President Badra Gunba believes restoring independent budgets will empower local authorities to become decision-makers, fostering financial incentives to expand the tax base. “When taxes collected from hotels, restaurants, and shops remain in the city, the administration has a direct incentive: the better the conditions for local businesses, the higher the city’s budget revenues,” Gunba stated.
Pitsunda is expected to transition to independent budget planning from 1 January 2027, while New Athos will follow from 1 January 2028. The precise allocation of tax revenues between the republican and local budgets will be determined by a working group and subsequently reviewed by parliament.
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