Regulation of Intergovernmental Relations in Ukraine in the Context of Decentralization and Transformation of Intergovernmental Finances

Abstract

In modern conditions, the system of interbudgetary relations in our country is at a critical stage of transition from urgent anti-crisis management to program-targeted planning. Decentralization reform today faces the challenges of unbalanced restoration of territories and the need to reassess horizontal alignment. The European integration direction of Ukraine determines the need to continue reforming the budget system in the context of strengthening local self-government with the expansion of their financial independence in solving priority tasks of local and territorial development. All this requires the formation of a mechanism for the formation of interbudgetary relations, which was able to ensure the interests of public authorities. With its help, central government bodies will be able to provide favorable conditions for strengthening territorial potential, improving the level of business activity and social welfare. Purpose. The purpose of the article is to reveal the regulation of interbudgetary relations in Ukraine in the context of decentralization and transformation of intergovernmental finances. Methods. The research methodology is based on the use of the following methods: analysis and synthesis, induction and deduction, systemic and integrated approach, graphical method and generalization method. Results. The features of the development of intergovernmental relations in Ukraine in modern conditions are revealed. The indicators of the financial capacity of territorial communities in Ukraine are analyzed. The directions of further development of intergovernmental relations in Ukraine are given. Conclusions. Intergovernmental relations in Ukraine in the context of decentralization and transformation of intergovernmental finances are an important mechanism for stimulating local development. However, the modern development of intergovernmental relations was formed under the influence of security factors, which exacerbated the need to combine the principles of independence of territorial communities with strict state supervision over the use of resources. It was found that the financial capacity of territorial communities is characterized by a significant imbalance. Despite the fact that the decentralization reform has granted territorial communities significant powers, the ability to exercise them without external financing is affected by the geographical location and the number of taxpayers. Many territorial communities in Ukraine currently have a rather low level of tax capacity, which is associated with the uneven distribution of production facilities and migration, which requires a reassessment of approaches to the collection of personal income tax and the expansion of local taxes and fees. Prospects for further research should include the development of new mechanisms for intergovernmental relations based on digitalization using the best foreign experience.