Agrarian Economy 2022 Т. 15 № 1-2: 83-92

Ensuring financial capacity of territorial communities and ways to improve it

Syniavska L., Candidate of Economic Sciences, Associate Professor
ORCID ID: 0000-0002-2723-9551
Rubai O., Candidate of Economic Sciences, Associate Professor
ORCID ID: 0000-0001-6103-8422
Ahres O., Candidate of Economic Sciences, Associate Professor
ORCID ID: 0000-0003-3398-0933
Lviv National Environmental University

https://doi.org/10.31734/agrarecon2022.01-02.083

ANNOTATION

Improving the current order of financial support of the amalgamated territorial communities and formation of an effective mechanism for local financial management is one of the conditions for economic and social development of the country and regions. The financial position of ATCs determines their economic potential, current and future development opportunities, fulfillment of commitments, implementation of municipal budget policy. Therefore, today, the search for the ways to improve financial capacity of local communities is relevant and requires further research. The article highlights the main results of the study of financial support of territorial communities. The expediency of introduction of the reform of power decentralization in Ukraine is substantiated, the essence and significance of which lies in the formation of financially viable municipal associations. The current conditions of normative and legal support of local self-government reform in Ukraine in the conditions of power decentralization is analyzed. It is established that one of the most important elements of the strategy of financial decentralization in Ukraine is the independence of the amalgamated territorial communities (ATCs), fiscal capacity, efficiency, speed and justification of decision-making. The work supplies analysis of domestic and foreign experience of inter-budgetary relations, which enables singling out the main types, forms, methods of financial equalization: vertical, horizontal (in the direction of budget funds); equalization of income, equalization of expenses, mixed equalization (by subject of equalization). It is noted that the driving force of their social and economic development is local self-government. The main criteria for calculating transfers are given. Based on the study, ways to improve the horizontal equalization of financial capacity of local budgets are proposed.

KEY WORDS

financial equalization, budget, transfers, territorial development, tax capacity, basic subsidy, decentralization

FULL TEXT

LINK

  1. Benovska, L., 2019. Financial equalization in the context of decentralization reform: problems and prospects. World of Finance, 2 (59), pp. 85–97 [online] Available at: http:// sf.wunu.edu.ua/index.php/sf/article/view/1228/1231 [Accessed 21 May 2022].
  2. Buriachenko, A. and Filimoshkina, I., 2018. Fiscal decentralization and financial capacity of the local government in Ukraine. Finance of Ukraine, 5, pp. 56–68 [in Ukrainian].
  3. Cabinet of Ministers of Ukraine, «Decentralization reform. Key results, 2020» [online] Available at: https://www.kmu.gov.ua/diyalnist/reformi/efektivne-vryaduvannya/reforma-decentralizaciy [Accessed 21 May 2022].
  4. Explanatory Note to the Draft Law of Ukraine «On the State Budget of Ukraine for 2020» [online] Available at: http://budget.rada.gov.ua [Accessed 22 May 2022].
  5. Horodetska, T., 2012. The impact of income differentiation on the formation of social shocks in society. Foreign trade: law, economics, finance, 3, pp. 94–99 [online] Available at: http://zt.knute.edu.ua/files/2012/03(62)2012/3_12_13.pdf [Accessed 21 May 2022].
  6. Kyrylenko, O., 2013. Achievement of strategic guidelines for the improvement of intergovernmental fiscal relations in Ukraine. Finance of Ukraine, 8, 19–28 [in Ukrainian].
  7. Lunina, I., 2014. Fiscal decentralization: the goals and directions of reforms. Economy of Ukraine, 11, 61–75. [online] Available at: http://nbuv.gov.ua [Accessed 21 May 2022].
  8. Lyutyj, I., 2009. Theoretical and methodological foundations of fiscal policy. Finance of Ukraine, 12, pp. 13–19 [in Ukrainian].
  9. Official site of the State Treasury Service of Ukraine [online] Available at: https://www.treasury.gov.ua/ua [in Ukrainian]. [Accessed 21 May 2022].
  10. State budget web-portal for citizens Open Budget – Local budgets [online] Available at: openbudget.gov.ua [Accessed 21 May 2022].
  11. Syniavska, L., Sholudko, O. and Bohach, M., 2021. Financial decentralization: economic preconditions and current state. Bulletin of LNAU. Economics of agro-industrial complex, 28, pp. 57–62 [in Ukrainian].
  12. Vasyliuk, O., 2017. Creating capability of unified territorial communities: personnel aspect. Efficiency of public administration, 2 (1), pp. 197–205 [in Ukrainian].