№ 1/2018

Fìnansi Ukr. 2018 (1): 72–87

BUDGET POLICY

YUSHKO Serhii ¹

¹Simon Kuznets Kharkiv National University of Economics
OrcID ID : https://orcid.org/0000-0001-6323-7687

The role of local taxes and fees in formation revenues of local government’s budgets

The independence of local budgets envisaged in the Budget Code is possible if local authorities have sufficient incomes. Ukrainian and foreign scientists believe that a significant place among such incomes should belong to local taxes and fees. The analysis shows that for a long time (from the moment Ukraine gained independence to the end of 2010), the role of local taxes and fees in the formation of revenues of local government budgets was minimal. The situation only changed in 2011 year. Local taxes and fees have become a significant component of the revenues of local budgets, their share in local budgets revenues constantly rises. The paper analyzes the composition and structure of local taxes and fees that took place at each stage of the formation of the local taxation system in Ukraine. The most fiscally significant payments are: at stage 1 (1993 – 2010 years) – market fee, communal tax and advertising tax; at stage 2 (2011-2014 years) – a single tax and a fee for certain business activities; at stage 3 (from 2015 year) – land fee and a single tax. The author shows that the growth of revenues from local taxes and fees, including an increase in their share in the revenues of local budgets, occurs both due to the inclusion in the list fiscally significant taxes and to the loss by local authority budgets of revenues from the main budget-forming tax – the individual income tax from 2015. The author demonstrates that the change of status (exclusion from the list of national taxes and inclusion in local taxes) of some payments did not lead to real qualitative changes in the system of formation of local budget revenues. The paper emphasizes the probability of the emergence of risks of disturbing the stability of the revenue base of administrative-territorial units in the context of the abolition of the legislative norm on the mandatory inclusion of the local taxes and fees to local budget revenues since 2011. The author stresses the inadmissibility of limiting the rights of local councils during implementing their own authority to introduce and administer local taxes and fees in their territories. The author believes that only elimination of the above-mentioned legislative collisions will make it possible to create real prerequisites for strengthening the financial independence of local budgets and ensure their development.

Keywords:local taxes and fees, local budgets, budgets of local self-government, local budget revenues, autonomy of local self-government

JEL: Н21, Н71

YUSHKO S. . The role of local taxes and fees in formation revenues of local government’s budgets / S. YUSHKO // Фінанси України. - 2018. - № 1. - C. 72-87.

Article original in Ukrainian (pp. 72 - 87)

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