Revenues of Local Budgets in the Context of War: Transformation of the Structure, Prospects for Further Formation

Abstract

The article names the factors that now affect the formation of the revenue side of local budgets in the context of Russia’s full-scale war against Ukraine, namely: budget and tax liberalization; deregulation of business; loss of potential for paying taxes by enterprises located in regions where active hostilities are currently underway; narrowing of the tax base. The dynamics of formation of the revenue part of local budgets in January – April 2022 is analyzed, its comparison with the same period of the previous year is carried out. The rating of the regions of Ukraine by the volume of formation of revenues in the general fund of local budgets per 1 resident in January – April 2021 and January – April 2022 is carried out. The rating of the regions of Ukraine by the amount of collected tax on personal income per 1 resident in January – April 2021 and January – April 2022 is carried out. The author analyzes the level of implementation of the planned indicators of collection of individual taxes to local budgets (in terms of regions). The results are as follows: the decrease in the revenues of the general fund of local budgets of Ukraine in the share of regions where active hostilities were conducted or are being conducted; underperformance of annual income tax collection lists (in half of the regions of the country less than 30% of the annual plan was collected, of which less than 20% was collected in three regions); significant reduction in the role of excise tax; significant reduction in the role of land payments in the formation of the revenue side of local budgets. The transformation of the structure of the revenue part of local budgets towards strengthening the budget-forming role of personal income tax and, accordingly, reducing the share of excise tax and land payments in all regions of Ukraine, as well as reducing the share of single tax in almost half of the regions, is shown. Prospects for further formation of the revenue side of local budgets are emphasized, taking into account particularly – on the one hand, liberalization of budget and tax legislation, and on the other – further active hostilities in Ukraine.

Keywords

• local budget
• local budget revenues
• taxes and fees
• budget revenue structure
• regional economy
• war.