The Decentralisation Builds up Resource "Muscles" of Local Self-Government, Yanina Kaziuk

The financial decentralisation introduced by the Government at the beginning of 2015 continues to build up the resource "muscles" of local self-government, in particular, the amalgamated territorial communities. It was so noted by Yanina Kaziuk, Financial Decentralisation Coordinator of the Central Office for Reforms at the Ministry of Regional Development (with the assistance of the U-LEAD Programme). According to her, that fact is confirmed by the information on the fulfillment by the communities of their budgets, which information has been prepared by the Ministry of Finance of Ukraine.

She recalled that 366 amalgamated territorial communities had direct inter-budgetary relations with the state budget in 2017.

"The communities which were established in the previous year, the number of which communities totals 207, only in this year received 60% of the revenues to their local budgets from the personal income tax. The financial analysis proves that their own resources for four months of this year, in comparison with the same period in the previous year, have increased by three times or by more than UAH 900 million, and totalled UAH 1.3 billion. And the earned revenues of the 159 communities, which received 60% of the personal income tax to their budgets already in the previous year, increased by 45% or by UAH 383 million", Yanina Kaziuk informed. She noted that the rate of growth of the earned revenues of local budgets of Ukraine comprised 35% in the aggregate.

Summing up, the expert stated that the earned revenues of local budgets of the 366 amalgamated territorial communities increased by two times and totalled UAH 2.6 billion (+ UAH 1.3 billion). Inclusive of inter-budget transfers from the state budget, the revenues of the general fund of local budgets of the 366 amalgamated territorial communities totalled UAH 5.5 billion.

Calculated per resident, the average amount of influx of the earned revenues in the amalgamated territorial communities increased by UAH 415 and totalled UAH 827.

"The figures themselves are hard to grasp. It would be easier to understand them when you see that hundreds of social infrastructure facilities are being renewed and constructed in villages and towns, when new possibilities are offered to children in rural schools in terms of their development - specialised training rooms are arranged for teaching educational subjects, local support programmes for gifted children are introduced, conditions and incentives for more skilled teaching staff are established. When rural out-patient departments are properly equipped and are capable of providing high quality primary care services. And repaired roads and new routes of public transport, and the administrative service centres, cultural centres - was anything of it ever done earlier? No, it was not, because the local self-government had neither powers, nor resources. Today, the Government has changed the situation, and we see that the work is humming in villages, towns and small cities", the expert added.

Reference information:

The influx of own resources to all 366 amalgamated territorial communities for January through April 2017 in comparison with the same period of 2016:

in total – UAH 2.6 billion (a twofold increase or by UAH 1.3 billion), in particular:

personal income tax totalled UAH 1.4 billion (an increase of 53% or by UAH 0.5 billion);

land use fee totalled UAH 389 million (an increase of 20% or by UAH 65 million);

flat-rate tax totalled UAH 415 million (an increase of 63% or by UAH 160 million);

excise tax totalled UAH 255 million (an increase of 41% or by UAH 75 million);

immovable property tax totalled UAH 43 million (an increase of 62% or by UAH 16 million).

Inclusive of transfers from the state budget, the revenues of the general fund of local budgets of the 366 amalgamated territorial communities totalled UAH 5.5 billion.

The influx of own resources to the local budgets of the 159 amalgamated territorial communities for January through April 2017 in comparison with the same period of 2016:

in total - UAH 1.233 billion (an increase of 45% or by UAH 383 million), in particular:

personal income tax totalled UAH 674 billion (an increase of 48%);

land use fee totalled UAH 183.5 million (an increase of 20%);

excise tax totalled UAH 133 million (an increase of 38%);

flat-rate tax totalled UAH 183 million (an increase of 68%);

immovable property tax totalled UAH 19.6 million (an increase of 55%).

Inclusive of transfers from the state budget, the revenues of the general fund of local budgets of the 159 amalgamated territorial communities totalled UAH 2.5 billion.

The influx of own resources to the local budgets of the 207 amalgamated territorial communities for January through April 2017 in comparison with the same period of 2016:

in total - UAH 1.349 billion (a threefold increase or by UAH 906 million), in particular:

personal income tax totalled UAH 725 billion;

land use fee totalled UAH 205.5 million (an increase of 21%);

excise tax totalled UAH 122 million (an increase of 45%);

flat-rate tax totalled UAH 232 million (an increase of 60%);

immovable property tax totalled UAH 23 million (an increase of 68%).

Inclusive of transfers from the state budget, the revenues of the general fund of local budgets of the 207 amalgamated territorial communities totalled UAH 2.9 billion.

Note. The information is provided with reference to official data of the Ministry of Finance of Ukraine on the basis of achievement of local budget targets by the amalgamated territorial communities prior to and after their voluntary amalgamation and after the acquisition thereby of the right to direct inter-budgetary relations with the state budge

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