Budget system of Ukraine: impact of war and challenges of post-war reconstruction

Abstract

The article examines and systematizes the directions and scope of the impact of the full-scale invasion of Russia on the budget system of Ukraine, in particular, on the structure and volume of budget revenues and expenditures, the growth of the budget deficit and public debt, changes in the public finance legislation, and the decrease in financial capacity of the regions. It was determined that due to the social and military orientation of a large part of budget expenditures, as well as numerous tax incentives, the possibilities of budget financing in areas that contribute to the economic development of the country are limited.The experience of foreign countries, in particular Poland, Israel, Georgia, Germany, and Japan, regarding the economic recovery and budgetary reformation after the end of the wars is summarized in the article. Priority measures to improve the budget system of Ukraine and exit from the budget crisis are proposed, which must be taken both during the war and immediately after its end. In particular, among the main measures of the wartime, support of small and medium-sized businesses, cancellation of temporary tax benefits, reform of the customs service, protection of investors rights and guarantees, financing of priority expenses such as defense, security and social protection, attraction of grant financing, use of fundraising tools and continued digitization of the economy are mentioned.After the end of the war, it was proposed to shift the direction of economic policy towards the active involvement of investors, development of export-oriented production and strategically important competitive industries, restoration of budget reforms (decentralization, medium-term planning, program-target method, expenditures review, digital services) and fiscal rules, reduction of debt burden with simultaneous social protection support of the population affected by the war.
 JEL classification: E62, N44, O52, H61, H62, H63