Financial Decentralisation: for the Seven Months of 2017, More than UAH 100 Billion was Received by Local Budgets

Over the period of January to July 2017, UAH 102.8 billion was paid to the general fund of local budgets, which amount totals 63.3 % of the planned annual targets approved by local councils.

It was reported so by Halyna Markovych, Coordinator of the focus area "Local Budgets" of the Project Office for Sectoral Decentralisation.

According to her, the highest annual performance of budgets is in Rivne (72%), Kyiv (69.3%), Poltava (68.7%), Volynska (68.1%), Chernivtsi (67.7%), and Ivano-Frankivsk (66.9%) Oblasts (Regions).

Due to the financial decentralisation, the addition of revenues of local budgets, in comparison with the same period of the previous year, totalled 32% or UAH 24.9 billion. In this connection, a higher than average growth rate of revenues in Ukraine was secured in 19 Oblasts (Regions). The highest growth rate is seen in Ternopil, Vinnytsia, Ivano-Frankivsk, Kirovohrad, Khmelnytskyi, and Kherson Oblasts", Halyna Markovych reported.

Also, she noted that, as in the previous periods, the addition with respect to all taxes was secured, in particular:

  • personal income tax, by 40.7% or by UAH 17.1 billion. In 17 regions, the growth rate is higher than average in Ukraine, while the highest one is seen in Ternopil, Ivano-Frankivsk, Kirovohrad, Vinnytsia, Chernivtsi, Khmelnytskyi, Kherson, and Cherkasy Oblasts;
  • flat-rate tax, by 43.1% or by UAH 3.7 billion. In 19 regions, the growth rate is higher than average in Ukraine, while the highest one is seen in Zakarpatska, Ternopil, Chernivtsi, Luhansk, Ivano-Frankivsk, and Rivne Oblasts;
  • land use fee, by 15% or by UAH 1.9 billion. In 19 regions, the growth rate is higher than average in Ukraine, while the highest one is seen in Zhytomyr, Zakarpatska, Kharkiv, Chernihiv, Volynska, Ternopil, and Donetsk Oblasts;
  • immovable property tax, by 65.9% or by UAH 0.6 billion. The differentiation of growth rate by regions as observed from the beginning of the year has been preserved - in Vinnytsia and Dnipropetrovsk Oblasts, the revenues have increased by two times, whereas, in Luhansk and Cherkasy Oblast, the addition totals 17% and 29.4%, respectively.

According to Halyna Markovych, higher revenue growth rates have been preserved by budgets of the amalgamated territorial communities.

Thus, the revenues of the general fund of budgets of the 366 amalgamated territorial communities that were established in 2015-2016, in terms of comparison, have increased by 39.8 % or by  UAH 1.3 billion (UAH 3.4 billion in January to July 2016, UAH 4.7 billion in January to July 2017).

In this connection, the growth rate of personal income tax collections totals 51.3% (+ UAH 0.9 billion); flat-rate tax, 50.9% (+ UAH 0.2 billion); land use fee, 19% (+ UAH 0.1 billion).

"It should be noted that, under the conditions of decentralisation, the efficiency of using the funds of local budgets depends on the local government authorities. Since today, the matters pertaining to the determination of priority guidelines of territory development and allocation of budgetary funds to certain areas fall under their authority, and the local government authorities are independent in making decisions on those matters", Halyna Markovych noted

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the Press Centre of the "Decentralisation of Power" Initiative

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