Local budget income as a source of financial support at local local level


  • Yu. A. Glushchenko candidate of economic sciences, associate professor, Associate Professor of Finance and Credit Poltava State Agrarian Academy http://orcid.org/0000-0001-5530-0340
Keywords: local budget revenues, local budgets, local government, intergovernmental transfers, territorial communities.

Abstract

The theoretical bases of formation of local budget revenues are investigated in the article and their role in the process of financial support of activity of local self-government bodies is determined. It has been found out that in the process of reforming the system of local self-government a significant share in local budget revenues is occupied by intergovernmental transfers, which contributes to the development of consumer trends. Formation of the state budget policy in the direction of ensuring the level of autonomy of local budgets, reducing the volume of intergovernmental transfers, and strengthening their financial capacity at the expense of non-tax sources are proposed.

The purpose of the article is to study the theoretical foundations and practices of local budget revenue generation in Ukraine, to clarify the problematic aspects of their inter-budgetary distribution and to develop practical recommendations for their improvement in the context of reform and budgetary decentralization.

The scientific novelty is to study the theoretical foundations of forming local budgets, in particular their important component - the revenue side. The structure of local budget revenues is considered, much attention is paid to the study of the status of non-tax revenues and transfer payments. According to the results of the study, the directions of increasing the level of independence of local budgets by stimulating them, reducing the volume and types of intergovernmental transfers, and strengthening their financial capacity partly due to the development of fiscal policy in the direction of mobilizing non-tax revenues.

Conclusions. An important tool for regulating socio-economic processes, the allocation of financial resources between population groups, industries and territories, is budget revenues.

The performance of functions of local self-government bodies requires a proper economic basis (material and financial resources).

Intergovernmental budget transfers, which are a storehouse, have a significant share of local budget revenues, which generates abstinence trends and stimulates local authorities to increase their tax capacity. Extending the geography of subsidized budgets has transformed transfers from a financial aid tool into a tool for redistribution processes, which reduces the efficiency of budgetary use.

Non-tax revenues account for a small proportion of local budget revenues but play an important role in balancing them. Therefore, promising directions for their growth should be the pursuit of local economic policies to increase the profitability of entities with partially state ownership; expanding the geography of local paid services; objects for payment of the state duty; improving the organization of the rating and offering of state and municipal property leases; creation of effective incentives in the organization of the budget process at the local local level for the creation of reserves of own revenues.

Summarizing the research, we state that the state budget policy should be aimed at increasing the level of independence of local budgets by stimulating them, reducing the volume and types of intergovernmental transfers, and strengthening their financial capacity partly due to the development of fiscal policy in the direction of mobilization of non-tax revenues.

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Published
2019-11-15
How to Cite
Glushchenko, Y. (2019). Local budget income as a source of financial support at local local level. Scientific Papers of the Legislation Institute of the Verkhovna Rada of Ukraine, (6), 52-61. https://doi.org/10.32886/instzak.2019.06.06