Tax decentralization in Ukraine: problems and prospects

Abstract

The paper examines the essence of the concept of “tax (fiscal) decentralization” according to different views of domestic and foreign scholars. The theoretical concept of tax (fiscal) decentralization is analyzed and defined. The stages of the legislative basis for tax decentralization reform in Ukraine are studied, in particular, the norms of the Law “On Amendments to the Budget Code of Ukraine on Reform of Intergovernmental Relations” and “The Concept of Reforming Local Self-Government and Territorial Organization of Power” are considered and analyzed. It is determined what types and amounts of tax revenues go to local budgets according to the introduced legislative changes. The dynamics of own revenues of local budgets during 2014–2019 is studied and the diagram is constructed. The dynamics and structure of tax revenues to local budgets by types of taxes during the period of decentralization reform in Ukraine are considered. Revenues for such types of taxes as income tax, state duty, environmental tax, domestic taxes, local taxes, personal income tax and the general dynamics of tax revenues were studied. The dynamics of revenues to the consolidated budget of Ukraine is studied. The dynamics of the share of local budget revenues in the consolidated budget revenues of Ukraine is calculated and analyzed. A comparison of local budget revenues and intergovernmental transfers during the period of decentralization reform was made. As a result, the lack of orientation of the country's budget policy to the policy of fiscal decentralization was confirmed. The problems of tax decentralization have been identified, among which the main problem is the lack of orientation of the country's budget policy to the policy of fiscal decentralization. Measures to improve the process of tax decentralization in Ukraine have also been proposed, among which the development of such measures that would allow local budgets to receive both additional tax opportunities and optimize expenditures is a priority.