Öz The basic aim of this study is to analyze the public sector balance and the problems of public finance in Turkish Republic of Northern Cyprus TRNC . In this respect, the efficiency of collecting public revenues and managing public expenditures will be considered. The results of the study can be summarized as follows: xChronic public deficit exists in the country especially due to inelastic personal expenditures, xThere is no efficient and coordinated control on public expenditures, xInformal sector is quite considerable, xTax efficiency of the country is very low when compared especially with European Countries