REVENUES OF LOCAL BUDGETS: THEORETICAL CONCEPTUALIZATION AND PRACTICE OF FORMATION
DOI:
https://doi.org/10.31891/mdes/2023-10-43Keywords:
local finance, revenues to local budgets, taxes and fees, transfers, territories, decentralization, local self-government bodiesAbstract
The article examines the formation of the local finance system, which consists of revenues to budgets and tangible assets, allowing local self-government bodies to ensure their own functional capacity by providing quality services to residents and business entities.
The main sections for classifying revenues to local budgets are identified, namely: tax revenues, non-tax revenues, revenues from capital operations, and transfers. Local revenues can be classified based on two main criteria: by economic nature (own and assigned) and taking into account interbudgetary transfers (own, earmarked, regulated).
The Temporary Regulations on Local Finance, adopted in 1923, are discussed as the first regulatory document establishing the basics of organizing finances at the local level, including the composition of local budgets; the procedure for collecting local taxes and fees; mechanisms for providing subsidies from the state budget to lower-level budgets; responsibilities and rights of local self-government bodies regarding local finance matters; and the procedure for drafting, reviewing, and executing local budgets.
It is determined that the foundation of local revenues should consist of local taxes and fees, which are mandatory, unconditional, and non-refundable payments to the budgets of local self-government bodies.
The stages of forming the basis of local taxes and fees are considered, starting from 1918 and continuing to the present day. It is noted that the composition of taxes and fees decreased at each stage, while the significance of payments in local budgets increased, as taxes that did not generate real revenues were eliminated in favor of those that required administration, and instead, payments verified over the years were added, similar to those administered in Western countries.
It is established that key conditions for building a democratic state include the autonomy and independence of local self-government, and significant importance is attached to the financial support of these bodies. The implementation of decentralization reforms, the need to review budgetary policies, and the strengthening of the role of local budgets require a new theoretical approach to understanding the socio-economic role and place of financial resources of local government bodies. The conducted research provides an opportunity for a deeper understanding of the essence of local finances and revenues to local budgets at different stages of societal development, as well as their role in shaping the institution of local self-government in the context of local and regional democracy development and decentralization of state governance.
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