Introduction. Local self-government bodies are the closest to human form of public authority, which is responsible for ensuring that citizens exercise most of their constitutional rights and freedoms. It is clear that the effective implementation of such tasks requires an appropriate level of financial resources. Therefore, in the context of administrative reform and financial decentralization, the issue of tax adequacy of local self-government is becoming increasingly important. Tax sufficiency means the establishment of taxes and fees, taking into account the need to achieve a balance of budget expenditures with its revenues. At the same time, in the domestic scientific literature, the development of the tax system in the context of local government reform and strengthening the role of territorial communities in the accumulation of taxes and fees to local budgets is insufficiently studied. Given the vector of reforming the tax system and changing the basic guidelines of fiscal policy, the emphasis on the role of local governments in collecting taxes to the local budget and improving mechanisms for their collection is particularly important. The purpose of the paper is to improve the theoretical and methodological principles and develop practical recommendations for the transformation of the tax system of Ukraine in terms of reforming local self-government. Results. Given the systemic decentralization changes and sectoral reforms that are being implemented in Ukraine today, there is a need to study the development of the tax system in the current conditions. In particular, the reform of local self-government, as one of the most successful, was characterized by a significant impact on the tax system and requires a new approach to its development. Therefore, to understand the direction of development, an important task is to study the institutional support for the development of the tax system in the context of local government reform. The main source of budget revenues at various levels is the distribution of state taxes and fees and the consolidation of their specific types in the state and local budgets for a long time. This not only ensures the independence of budgets, but also enhances their role in public policy, enables local governments without the intervention of central government to form their own financial resources and make long-term forecasts of socio-economic development of local communities. Tax sufficiency is a state in which a sufficient amount of revenue for the budget from taxation is achieved, i.e. taxes must provide sufficient funds for the functioning of the economic system. Conclusions. Assessing the revenues of territorial communities, it should be noted that local budget revenues form tax revenues, non-tax revenues and other revenues, while the gross share is tax revenues. Thus, having studied comprehensively the coefficients of assessment of tax sufficiency of budgets of territorial communities, it should be noted that four out of five indicators show positive dynamics, only the coefficient of tax accumulation decreases. Therefore, we can assume that the budgets of territorial communities of Lviv region are tax sufficient.