Financial results of local budgets over 5 months of 2018

During January-May 2018, revenues from all local budgets of Ukraine to the general fund (excluding interbudgetary transfers) amounted to UAH 89.7 billion. Compared to the same period in 2017, revenues grew by UAH 17.4 billion or by + 24.1%. Taking into account the active amalgamation processes in 2015-2017, which resulted from the expansion of their income base, the surplus rate of revenues of the budgets of AHs in relation to last year made up +64,8% (1,6 times increase), reported Yanina Kazyuk, financial decentralisation coordinator of the Central Reform Office under MinRegion (with the support of the U-LEAD with Europe Programme)

In 2018, 665 AHs, of which 299 held their first elections in 2017, have direct interbudgetary relations with the state budget, and this year they are for the first time receiving revenues foreseen for the AH budgets. According to the expert, in January-May this year, the inflow of 366 AHs, formed in 2015-2016, increased by +22.9% and amounted to almost UAH 4.0 billion. The revenues of 299 communities, that have only begun to receive personal income tax this year, amounted to UAH 3.5 billion, which is 2.7 times more than the revenues received by them over 5 months of 2017.

Inflow of own revenues of 665 AHs
over January-May 2018, compared to January-May 2017, million UAH


Personal income tax

As before, revenues from PIT payment account for the largest share in the local budget revenues – UAH 50.8 billion or 56.6% of the total amount of local budget revenues. In comparison with January-May of the last year, the tax revenue grew by + UAH 11.0 billion or by 27.8%. Over the budgets of AHs, the inflow of personal income tax increased by 2.3 times and amounted to UAH 7.4 billion.

Land payment

The second major source of local budget revenues is the payment for land (in the structure of revenues it accounts for 11.6%), which is related to the property tax and is a component of local taxes. In the reporting period, local budgets received UAH 10.4 billion of land payments, which is +1.8% more than the revenues for the same period last year. The budgets of the AHs increased by +9.5% (+UAH 89.2 million).

Single tax

The revenue surplus from single tax to all local budgets is +28.7% (UAH 2.7 billion). Its sum amounted to UAH 12.2 billion. Over the budgets of AHs, revenues grew by +30.9% (+UAH 288.5 million), over the budgets of cities of oblast significance – by +24.9%.

Tax on immovable property other than land plots

Dynamic revenue growth from the payment of immovable property tax, other than land plots, continues. During January-May, the revenues amounted to UAH 1.4 billion, which is 54.2% of the planned indicator for the whole 2018 and exceeds the last year's revenue figure by 1.6 times. Revenue growth in AH budgets is +65.8%, in the budgets of cities of oblast significance it makes up +53.0%. High revenue surplus indicates the interest of local self-government bodies in mobilising funds to their budgets and availability of reserves for further strengthening of hromadas’ financial capacity.


Fee for administrative service provision

Besides, local budgets received UAH 1.4 bn of payment for administrative service provision, which is UAH 0.4 bn more (+41.4%) compared to the revenues over the same period last year. In the budgets of cities of oblast significance, revenues from provision of administrative services grew by 1.7 times, while in the budgets of AHs the payment for administrative service provision increased by 1.8 times. 

Inflow of excise tax on retail sales

Revenues of excise tax on retail sales amounted to UAH 5.3 billion, which is by 1.1% more compared to the same period in 2017. UAH 3.0 billion of this amount were received from the excise tax on fuel, which local budgets receive from the state budget in the amount of 13.44% of the excise tax on fuel produced and imported into the customs territory of Ukraine.

Yanina Kazyuk noted that current revenue trends make it possible to predict that in 2018, the annual amount of revenues will amount to UAH 236-240 billion, which is 12.8-14.7% more than the currently approved annual plans. 

Balances of local budgets and funds on deposit accounts

The financial capacity of local budgets is evidenced by the balance of funds on the accounts as of 1 May of the current year.



In the course of monitoring it was noted that the balance of funds of the general fund of all local budgets of Ukraine amounted to UAH 48.4 billion, including on treasury accounts – UAH 39.7 billion, on deposit accounts in banking institutions – UAH 8.7 billion (18% of the total balance sum).

As of 1 May 2018, the balance of funds of the general fund of local budgets of cities of oblast significance amounted to UAH 10.8 billion, including on deposit accounts in banking institutions – UAH 6.3 billion, which is 58.3% of the total balance sum of budgets of cities of oblast significance.

As of 1 May 2017, in the budgets of 665 AHs, the balance of funds on treasury accounts of hromadas was UAH 3.7 billion, and UAH 3.4 million – on deposit accounts.

State support for hromadas’ development and infrastructure building

The state has increased the amount of financial support to local authorities for hromadas’ development and infrastructure building. This year, this support amounted to UAH 19.37 billion, which is 39 times more compared with the beginning of the reform (from 2014).

In addition, in 2018, a subvention for the construction, reconstruction, repair and maintenance of public roads of local importance is envisaged in the amount of UAH 11.5 billion.

More information on monitoring of the process of decentralisation of power and local self-government reform can be found HERE.

More information on local budgets and financial decentralisation is available HERE

Indicators of the financial decentralisation results were prepared by Yanina Kazyuk, Ihor Herasymchuk, Viktor Ventsel, Svitlana Demydenko, experts of the Financial Monitoring Group of the Central Reform Office under MinRegion (with the support of the U-LEAD with Europe Programme and the SKL International Project).


budget budget analytics Yanina Kazyuk


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