The Annual Summit of the All-Ukrainian Association of Communities (VAG) was held in Khmelnytskyi region, where an updated legislative agenda was presented and new approaches to taxation and the use of resources for community development were outlined.

The focus was on strengthening financial capacity, effective management of land and natural resources, and expanding the powers of local self-government.

The event brought together almost 200 participants from all over Ukraine. These included community leaders, mayors and representatives of local governments from different regions, who work daily to develop their territories. Representatives from the Office of the President of Ukraine, the Verkhovna Rada of Ukraine, the Cabinet of Ministers of Ukraine, central government executive bodies, and international organisations also took part in the discussions.

Key priorities of the Association for 2026, which define new approaches to taxation and resources across various areas, include:

Activities of local governments

The Association will focus on finding solutions for communities with regard to quorums and the regulation of remuneration. This concerns Draft Law No. 11054, which provides for a new staffing structure that would eliminate manipulation of bonuses and prevent the use of this tool for political purposes.

The draft law on the delineation of powers between levels of authority remains fundamental – a document that in fact continues the decentralisation reform. The Association insists on its improvement in line with the updated concept of local self-government reform.

A distinct problem is the shortage of councillors in local councils due to mobilisation and emigration. Many communities are already at risk of being unable to make decisions – particularly those concerning budgets. The Association is seeking a legislative solution to this situation.

Resource decentralisation and finance

The key philosophy underpinning the legislative agenda remains the continuation of resource decentralisation. The Association considers any proposals to merge or restructure communities to be premature until all possible resources for ensuring their financial capacity have been identified.

Among the key instruments for strengthening the financial capacity of communities, the agricultural sector occupies a special place. For most communities, it is a primary source of income: on average, around 90% of local budget revenues are generated through personal income tax on the lease of agricultural land. Therefore, the development of the agricultural sector directly determines the level of community well-being.

For this very reason, the Association consistently supports all legislative initiatives aimed to develop the sector, particularly those that provide access to European Union financial mechanisms. This includes, in particular, the establishment of a paying agency, the implementation of the FADN system and the development of agricultural statistics – fundamental elements required for participation in the Common Agricultural Policy of the EU and support programmes such as LEADER.

These are technical but critically important prerequisites for attracting significant resources. After all, whilst other countries, such as Moldova and Georgia, have been successfully taking advantage of these opportunities for several years, Ukraine is only just beginning to meet the necessary conditions.

Administration of local taxes

With regard to personal income tax, the Association supports a model of payment based on place of residence rather than the place of registration of the legal entity. Under such a model, small communities would receive more revenue, and businesses would go where the people are, people would go where the infrastructure is, and infrastructure would go where the taxes are.

An experiment is currently underway in 15 communities with regard to the administration of local taxes (on property and land). The results will form the basis of a government draft law. In parallel, the issue of administrative fees is undergoing analysis. It is expected that this year the fee will be reviewed and significantly increased. The Association has presented a clear position on the fair setting of the administrative fee – in line with the actual cost and content of the services.

Land and natural resources

In the land sector, the association is working on the regulatory and monetary valuation of land and on raising the ceiling on rent rates. Several revaluation proposals have already been submitted to the Cabinet of Ministers for consideration.

The most pressing concern remains the situation with forests. Due to amendments to the Forest Code, responsibility for damage to forests not assigned to any specific management body has been placed on local governments, rather than on the offenders.

The Association emphasises the need to amend this provision.

However, the matter of transferring forest land to communities remains unresolved. Unlike agricultural land, these resources remain in a “grey zone”, particularly so-called agroforests, which are effectively not properly managed and do not generate income for communities.

The Association has developed proposals to simplify the transfer of such land and suggests introducing an effective management model – in particular through open auctions for the right to use the land. This will bring the resource out of the underground economy, ensure transparent management and significantly increase revenue for local budgets.

This represents significant potential – between 1.5 and 3 million hectares of forest that could become a real resource for the development of communities.

Education, medicine, infrastructure

In education, topics like specialised senior secondary schools and school enrolment in rural areas are discussed.

In the medical sector, the association proposes applying a salary adjustment factor to the salaries of medical staff in sparsely populated communities – by analogy with mountainous regions – to stop the drain of specialists to the cities. The matter of equal requirements for public and private medical institutions within the integrated healthcare system is also raised.

On the matter of roads and infrastructure, the association seeks to enshrine in law the right of communities to repair local roads independently without relying on subsidies channelled through regional budgets – as such a mechanism significantly increases the cost of works. The broader objective is to ensure citizens’ mobility: so that communities can decide for themselves how to allocate funds between roads and other transport infrastructure.