This chapter explores the role of municipal fees as an alternative funding source for local service provision in Croatia. Through a review of relevant legislation, the analysis examines both the benefits and challenges associated with utilizing municipal fees, as well as the delicate balance between national regulation and local autonomy in setting specific fees and exemptions. The research explores the diverse types of municipal fees and critically evaluates their potential impact on equity, efficiency, and sustainability of local services. It further examines the challenges associated with fee implementation, including administrative complexity, transparency concerns and potential burdens on vulnerable populations, and it offers mitigation strategies for addressing the identified challenges. By analyzing the legal framework and its practical implications, this chapter aims to contribute to a more informed discussion on the effectiveness of municipal fees in supporting local service delivery and promoting balanced territorial development in Croatia.