Tax reform has not intensified the financial autonomy of local budgets
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December 1.12.2011 |
Contact person: Maxim Koryavets, e-mail: pfirs@ukr.net, tel.: +380635794655 |
On June 5, 2012, a roundtable on “Impact of tax reform on the financial autonomy of local budgets of Chernihiv region: results of analysis and search for prospects” was held at the Clean Policy Expert Club.
The event was held within the framework of the project “Local Taxes: Public Monitoring of the Impact of Tax Reform on Financial Independence of Local Budgets”, which is implemented by the Polissya Fund of International and Regional Research with the support of the International Renaissance Foundation.
Project manager Maxim Koryavets spoke about the stages of analysis under the project mentioned and indicators of financial independence of local budgets, which were based on the development of expert opinions.
Project expert Maxim Zabashtansky emphasized the key points that were found during deep interviews with experts in the budgetary and tax sphere of the Chernihiv region within the framework of the project. In particular, there were a number of reasons preceding the tax reform in Ukraine, including: the need for simplification, stabilization and codification of tax legislation; the need to eliminate deficiencies in the mechanism of tax administration; the need to reduce the number of taxes and fees; the need to create additional “levers” stimulating the development of the country’s economy, increasing the investment attractiveness of the country; The need to increase the revenue parts of the state and local budgets of Ukraine to support the state social security system.
The expert presented the results of the calculation of indicators of financial independence of local budgets of three levels: Chernihiv regional budget, Chernihiv district budget, Chernihiv city budget.
Along with the increase in the nominal amount of budget revenues of all levels, there was a tendency to reduce the share of the special fund in the structure of local budget revenues, to increase the share of official transfers (in the structure of Chernihiv district and city budgets).
There has been a significant change in the structure of local budget revenues from local taxes and fees under the influence of tax reform. If in 2009 and 2010 the largest share in the structure of local taxes and fees that came to the budgets of Chernihiv region, Chernihiv district and the city of Chernihiv occupied a communal tax, advertising tax, market fee, fee for issuing permission for the placement of trade facilities and services. The main role in the structure of local tax payments is played by a single tax and levy for conducting certain types of business activities.
Despite the tendency to increase the share of local taxes and fees in the structure of budgets of regional, district and city levels, in 2011 it remains very low (for the budget of Chernihiv region – 1.2%, Chernihiv district – 1.2%, Chernihiv – 2.5%).
The President of the Polissya Fund Gennady Maxak presented recommendations to improve the efficiency of state policy in the field of local taxation. The roundtable participants were invited to discuss them.
Deputy Head of Financial Administration of Chernihiv City Council Olena Lysenko noted the need to transfer land fees from the category of national taxes to the list of local ones, which will increase the financial independence of the city budget. The question of real estate tax other than the land is still open because of the impossibility of clearly defining its payers. It also stated the need to return the fee for the use of local symbols to local tax revenues, as it was one of the most important local taxes in the structure of the Chernihiv city budget before the tax reform is implemented.
The deputy of the Chernihiv Regional Council Bikona Sergey Fedorovich emphasized the need to further refine the tax legislation in the direction of creating stimulating levers for small and medium -sized businesses.
The recommendations presented will be refined and submitted to the relevant institutions for further consideration.
The purpose of the project “Local Taxes: Public Monitoring of the Impact of Tax Reform on the Financial Independence of Local Budgets”, carried out by the Polissya Fund of International and Regional Studies with the support of the program of strengthening the influence of the Civil Society of the International Renaissance Foundation, is to assess the impact of tax reform in Ukraine on the role of local taxes.