DECENTRALIZATION OF POWER: FINANCIAL PROBLEMS AND PRIORITY DEVELOPMENT DIRECTIONS

Alla Dvigun; Nataliya Metelenko

Alla Dvigun
Nataliya Metelenko

Keywords: decentralization of power, budget decentralization, interbudgetary relations, local government, association of territorial communities.

Abstract

The author considers the concept of decentralization of power as a process of state power alienation in favor of the territorial community as well as mechanisms of interaction between public authorities and local governments. The author analyzes the development of creating associations of territorial communities (ATC); substantiates positive results of fiscal decentralization reform; outlines the further directions of the budget decentralization reform in Ukraine. The budget decentralization as a decentralization of financial and material resources was examined. The author formulates advantages and component parts of the budget decentralization; analyzes the changes that took place during the decentralization of power reform, which have affected the processes of budget regulation.

It is proved that reduction of subsidies of local budgets is one of the main indicators, which refers to increasing the financial independence of local governments. It is noted that special attention should be paid to the ecological tax. The author proposes to consider at the governmental level the possibility of keeping the ecological tax in full in the budgets of those settlements, where there is an extremely high level of man-made and anthropogenic load. According to the results of the research, the author proposes the measures aimed at strengthening the financial basis of local governments; reveals the problems of budget decentralization implementation; considers the problems of financial provision of territories development. The author comes to the conclusion that the interrelation of legislative changes in the Tax and Budget Codes has contributed to the transformation of local budgets into effective instrument of socioeconomic development of administrative and territorial units. The author underlines the need of strengthening control and responsibility for compliance with budget legislation on the way to solving financial problems of power decentralization.

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