MECHANISMS FOR STRENGTHENING THE FINANCIAL SELF-SUFFICIENCE OF TERRITORIAL COMMUNITIES IN CONDITIONS OF INSTABILITY: PRACTICAL ASPECTS

Abstract

Negative trends, new problems and the new reality in which the territorial communities found themselves require a quick response and renewal of the mechanisms for strengthening their financial self-sufficiency.

The purpose of the article is to justify effective mechanisms for strengthening the financial self-sufficiency of territorial communities, taking into account modern challenges. The article proposes mechanisms for strengthening the financial self-sufficiency of territorial communities in the conditions of instability in Ukraine. It is argued that the expansion of the powers of the local government in terms of the administration of local taxes and fees, as well as the strengthening of control over their receipts, will allow the mobilization of additional revenues to local budgets, which for certain reasons are not used. This will be facilitated by the transfer of certain functions to the local level, streamlining of digital registers of property and accounting of taxpayers; formation of reliable information on the objects of taxation, revision of the taxation base on market basis, strengthening of cooperation between tax authorities and self-governing municipalities. Minimization of gaps between delegated powers and the amount of financial resources will be facilitated by updating the mechanism of horizontal equalization of the tax capacity of local budgets in terms of: a) taking into account the indicators of the budget of the city of Kyiv in the calculation of horizontal equalization of financial capacity; b) assessment of the real population of communities; c) taking into account when calculating other taxes, except personal income tax; d) reduction of allocation to the budget, for example from 50% when the tax capacity index exceeds 1.1 to 30%. The expediency and timeliness of improving the municipal borrowing mechanism through: a) strengthening of information support for borrowers at the local level and gradual increase in the level of creditworthiness of communities are argued; b) expansion of equal rights of communities in access to investment resources, allowing municipal borrowing not only to urban territorial communities, but also to rural and township communities. The need for legislative regulation of the institutional foundations of the completion of the decentralization reform is substantiated.