Financial decentralization in Ukraine: preliminary results and prospects

Abstract

The scientific paper examines the need and prerequisites for implementing financial decentralization in Ukraine, as a process of delegation of powers from the national level to the local or regional level of authorities in the area of formation and use of local self-government financial resources. Decentralization is carried out with the aim of strengthening the financial capacity of local authorities to improve the communities development potential in various directions (economic, social, innovative, entrepreneurial, etc.), improve the quality of services to residents, create an favorable business environment and attract investments to communities, comprehensive implementation of social and economic community potential. The purpose of this study is to analyze specific results of financial decentralization, the practice of forming local budgets, and working out proposals for strengthening the financial capacity of local self-governments in the context of current military operations. The scientific paper examines problematic aspects of the practical implementation of decentralization processes in foreign countries and Ukraine. Certain stages of financial decentralization in the direction of strengthening the revenue base of local self-government are analyzed. The dynamics of revenues of the consolidated budget of Ukraine in terms of indicators of the state and local budgets were studied, the ratio of these indicators was evaluated from the point of view of the results of the decentralization process. The dynamics of the composition and structure of revenues of local budgets, the state of their implementation in the conditions of military operations, the most important sources of tax revenues of local budgets were identified, and some suggestions  of their increase were proposed. Local authorities within the framework of their competence have to pay attention on the maximum promotion of business activity, the formation of a system of its support and the attraction of additional investments to strengthen the long-term financial capacity of communities.