Two cities in Abkhazia to be allowed to manage their own revenues

In Abkhazia, two resort towns—New Athos and Pitsunda—will be allowed to manage their own revenues.

By making this “generous gesture”, the authorities are not losing anything, as both resorts are already self-sufficient and contribute more to the state budget than they receive in funding.

The decision to allow Pitsunda and New Athos to form their own budgets was made during a meeting held at the presidential administration.

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Before a new law “On the fundamentals of the budget system and budget process in the Republic of Abkhazia” came into force in 2015, these towns had their own local budgets. However, their financial status was later effectively reduced to that of settlements and villages.

This meant that most of the taxes collected by these resorts were channelled to the republican and district budgets (Pitsunda is part of the Gagra district, while New Athos falls under the Gudauta district). Funds were then redistributed back to the towns for municipal services and social needs in line with budgets approved by district assemblies.

According to Murat Adzhba, chairman of the Pitsunda Assembly (local parliament), this system limits the ability of local deputies to address even basic municipal and social needs:

“It is not only about the budget, but also about the lack of certain powers—we cannot respond in a timely manner to the issues the city faces.

Residents have to appeal to the district administration or the Assembly, which in turn refers the issue to the head of Pitsunda, who then turns to the district head. As a result, issues that could be resolved in two or three days sometimes drag on for weeks.”

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Since 2015, the assemblies of Pitsunda and New Athos have effectively ceased to function as genuine local self-government bodies, turning instead into “advisory bodies” without financial tools to address urban problems.

Abkhazia’s president, Badra Gunba, believes that restoring independent budgets for Pitsunda and New Athos will allow local authorities to move from the role of “petitioners” to that of “decision-makers” in their own cities, while also creating additional 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.

Administrations will be motivated to ensure that every hotel and guesthouse operates legally, as this money will go towards developing their own city,” Gunba said.

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Pitsunda is expected to transition to independent budget planning from 1 January 2027, while New Athos will follow from 1 January 2028.

The exact distribution of tax revenues between the republican and local budgets will be determined by a working group set up by the president and then submitted to parliament for consideration.

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Pitsunda and New Athos to gain autonomy