# 59 390-394 View full article

УДК 338.4

DOI: https://doi.org/10.36887/2415-8453-2024-4-59

Plahotniuk Volodymyr,
PhD student of the Department of Economics, Entrepreneurship and Business Analytics,
State Tax University,
https://orcid.org/0000-0002-8555-0698

JEL classification: R20

The article is devoted to the study of the financial self-sufficiency of local budgets in Ukraine under crisis challenges, particularly the decentralization reform, which plays a key role in forming the financial autonomy of regions. The author analyzes the impact of decentralization on the economic and social development of regions and examines the challenges arising during the implementation of this reform. The main focus is on the dynamics of the formation of amalgamated territorial communities, the efficiency of financial resource allocation, and the role of the tax base in ensuring the budgetary capacity of communities.It is noted that decentralization, launched in 2014, created fundamental conditions for changes in territorial management. The amalgamated communities gained financial autonomy, an expanded tax base, and the ability to form their own budgets. This has enabled more effective use of financial resources, attracting investments, and ensuring a high standard of living for the population. However, the slow pace of ATC formation in the initial stages of the reform is identified as a problem, caused by resistance from local authorities and a lack of understanding of the advantages of the new governance system Special attention is given to the challenges faced by local budgets in connection with the full-scale war that began in 2022. The article presents an analysis of the dynamics of local budget revenues, including transfers, tax revenues, and their dependence on the economic activity of regions. The statistics in the article demonstrate that the greatest challenges arise in frontline regions, whereas rear areas show some income growth due to increased taxes on the salaries of military personnel. It is concluded that the financial self-sufficiency of local budgets remains critical for the sustainable development of Ukraine’s regions. The recommendations presented in the study include optimizing the tax base, stimulating economic activity, and ensuring a balanced distribution of financial resources among regions.

Keywords: decentralization, local budget, regional development, transfers, PIT, ATC, financial self-sufficiency.

Rеferences

  1. Horyn, V. P. (2020). Finansovyi mekhanizm zabezpechennia suspilnoho dobrobutu: Teoretychna kontseptualizatsiia ta problemy funktsionuvannia [Financial mechanism for ensuring public welfare: Theoretical conceptualization and functioning problems]. Ternopil: TNEU.
  2. Yevropeiska khartiia mistsevoho samovriaduvannia: Rada Yevropy; Khartiia, Mizhnarodnyi dokument vid 15.10.1985 (redaktsiia vid 16.11.2009) [European Charter of Local Self-Government: Council of Europe; Charter, International Document from 15.10.1985 (version from 16.11.2009)]. Available at: https://zakon.rada.gov.ua/laws/show/994_036#Text
  3. Sokyrko, O. S., & Plakhotniuk, V. V. (2019). «Analysis of the state of local budget revenues during the implementation of budget decentralization reform». Biznes-Inform, no. 7, pp. 304–311.
  4. Kruk, O. M. (2011). «Qualitative assessment of local budget financial stability». Visnyk Donbaskoi derzhavnoi mashynobudivnoi akademii: zb. nauk. prats, no. 3(24), pp. 133–137.
  5. Ministerstvo finansiv Ukrainy [Ministry of Finance of Ukraine]. Available at: https://www.minfin.gov.ua/news/bjudzhet/ptsm
  6. Plakhotniuk, V. V. (2023). Teoretychni osnovy zabezpechennia finansovoi samostiinosti rehioniv [Theoretical foundations for ensuring the financial independence of regions]. Ekonomika ta suspilstvo, no. 56. https://doi.org/10.32782/2524-0072/2023-56-157
  7. Biudzhetnyi kodeks Ukrainy: Kodeks Ukrainy; Zakon, Kodeks vid 08.07.2010 no. 2456-VI [Budget Code of Ukraine: Code of Ukraine; Law, Code from 08.07.2010 no. 2456-VI]. Verkhovna Rada Ukrainy. Available at: https://zakon.rada.gov.ua/laws/show/2456-17#Text
  8. Monitorynh protsesu detsentralizatsii vlady ta reformuvannia mistsevoho samovriaduvannia [Monitoring of the decentralization process and local self-government reform]. Natsionalnyi proekt «Detsentralizatsiia». Available at: https://decentralization.gov.ua
  9. Kuzhelev, M. O., & Plakhotniuk, V. V. (2018). «Formation of local budgets under budget decentralization conditions». Ekonomichnyj visnyk universytetu, no. 36(1). Available at: http://nbuv.gov.ua/UJRN/ecvu_2018_36(1)__36.
  10. Nitsenko, V. S. (2012). Potentsial rozvytku krupnotovarnoho ahrobiznesu v Ukraini. Dosvid roboty pidpryiemstv pry finansovii kryzi [Potential for the development of large-scale agribusiness in Ukraine. Experience of enterprises during the financial crisis]. In Proceedings of the All-Ukrainian Scientific and Practical Conference (Pp. 15-16). Mykolaiv.

The article was received 18.10.2024