Legislation on budget decentralization will continue to be developed with suggestions of local self-government bodies taken into consideration

Recommendations and suggestions from representatives of local self-government bodies, set forth during regional round table discussions on budget and tax decentralization, will be elaborated, studied, and taken into consideration during further development of the legislative base. The statement was made by governmental experts from Minregion, Ministry of Finance, Ministry of Health, Ministry of Education, and State Fiscal Service, based on the results of concluding regional round table on budget decentralization, which took place on April 7 in Kyiv.

According to the experts, most suggestions coming from local self-government representatives and concerning further work under new inter-budgetary relations  are well-grounded, and call for further development by experts, in order to be embedded into the legislation in future.

The experts underlined, that, as a result of the reform, all oblast’ budgets of this year were surplus ones, while revenue levels of local budgets during the first months after the new legislation entered into force were, in some cases, higher than expected values.

For example, according to the State Fiscal Service of Ukraine, revenues of local budgets of Vinnytsia, Zhytomir, Chernigiv, Cherkasy, Kyiv oblasts’, and the city of Kyiv, amounted to over 5.8 billion UAH as of April 1, 2015.

“We’ve got the larger part of the taxes, which we can now administer. Moreover, we can influence them, which was not the case before. At the same time, funding of education, social sphere, and healthcare, is provided directly from state budget. These funds are, of course, insufficient. We allocate additional 3.5 billion UAH. At the same time, we have an absolutely clear plan of revenues, and we must form the budget in accordance to these revenues”, noted Igor Nikonov, the first deputy head of Kyiv city state administration.

The average relative increase of revenues of general fund of local budgets across Ukraine amounted to 35.4%.

“The key objective of budget reform was to increase the revenues of local budgets. And it has been already achieved in the first quarter of the current year”, underlined Yevgen Kuz’kin, head of Department of local budgets of Minfin.

Government experts reminded that, on the whole, as a result of implementation of the new funding model, this year local budgets got an additional resource on top of their general funds, amounting to more than 22 billion UAH.

“Systematic work is conducted, concerning the innovations introduced into Budget and Tax Codes. Its task is to allow local budgets to get funding volumes, they did not even hope for, in the most efficient way, and as soon as possible”, said Nadiya Pryvalova, head of Department of methodological work on taxation of the SFC of Ukraine.

It was reported that government experts conducted educational work in the regions on budget and tax decentralization. Round tables involving the management of oblast’, raion, city, village, and settlement councils, took place in Dnipropetrovsk, Ivano-Frankivsk, Kharkiv, and Kyiv, and covered all the regions of the country.

A series of regional round-table discussions on budget decentralization is conducted under support of the Swiss-Ukrainian project “Decentralization support in Ukraine” (DESPRO), and the Government of Great Britain.

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