Budgetary policy in terms of local self-government financial basis transformation in Ukraine

Economic Annals-ХХI: Volume 151, Issue 5-6, Pages: 82-85

Citation information:
Voznyak, H. (2015). Budgetary policy in terms of local self-government financial basis transformation in Ukraine. Economic Annals-XXI, 5-6, 82-85. https://ea21journal.world/index.php/ea-v151-20/

Halyna Voznyak
PhD (Economics),
Institute of Regional Research named after M. I. Dolishniy of the NAS of Ukraine
4 Kozelnytska Str., Lvіv, 79026, Ukraine
gvoznyak@gmail.com

Budgetary policy in terms of local self-government financial basis transformation in Ukraine

Abstract. In recent years the problem of  local finances management  in Ukraine has been   in    focus of  economic discussions due to  an imperfect system of administrative-territorial structure, an excessive degree of the budgetary  funds centralization,   an opacity of the  principle  of  subventions separation in the regional section,  a limited access of   local budgets  to  borrowing market,  an absence of unified standards of public services and their evaluation criteria, an instability of own revenue sources of local budgets. In order to solve these problems it is important to take measures for the timely implementation of reforms, the main contents of which are budgetary decentralization and decentralization of power executive functions. To improve Ukraine’s budgetary policy of  regional development, we have analyzed and evaluated key areas of the fiscal reform implementation, the reform of local self-government and the territorial organization of power in Ukraine.

Results. The conducted  detailed analysis of fiscal innovations and the first steps of the administrative and territorial reform realization  in  Ukraine testified: a)  expediency  and timeliness of  local self-government financial foundations reforming; b) controversial issues that require further discussion, i.e. redistribution  of  environmental and single tax and consolidation of local budgets’ stable financial sources (PIT and Income Tax) which does not minimize dependence on transfers from the State Budget.  The formula for calculating the index of  local budgets’ tax capacity needs improvement as Ukrainian regions were not  fully able  to solve the problems of previous years with treasury services. Introduction of health and education subventions provides covering    of  only current expenditures for the budgetary institutions and, therefore, a level of social spending decreases. 

Conclusions. As a result of the conducted study, the author has proved a necessity of updating the existing approaches to budgetary provision of regional development and outlined the ways of its improvement.

Keywords: Regional Development; Local Self-Government; Budgetary Decentralization; Administrative-Territorial Reform

JEL Classification: H61; R58; H72

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Received 10.04.2015