Post-graduate student at the Department of Finance
of the Kyiv National University of Trade and Economics
Kyoto str., 19, Kyiv, 02156, Ukraine
FINANCIAL CAPACITY OF LOCAL BUDGETSBackground. The initiated processes of fiscal decentralization aimed to increase the local budgets’ financial capacity as well as to provide the sufficient financial resources for the territorial communities to perform their own and delegated powers.The public financial institutions’ efforts should be focused on the quality improvement in tax administration, the certain tax bases’ expansion, and the elimination of the shadow economy.
The aim of this paper is to justify the priority directions for the local budgets’ financial capacity raise, regarding the expediency of the tax revenues’ fiscal efficiency increase.
Materials and methods. Theoretical and methodological bases of this study are represented by the scientific works, addressing the problem in question, of domestic and foreign scientists. The dialectical, systemic and structural approaches, the methods of analysis, synthesis, comparison, generalization, and scientific abstraction were applied.
Results. The approaches to raisethe tax revenues’ fiscal efficiency in the local budgets’ system were developed. The directions to enhance the local budgets’ financial capacity were determined. The analysis of the factors affecting the tax revenues’ forecasting effectiveness was carried out. The statements on the quality improvement in the level of tax administration were proposed. The ways to expand the income taxes’ (collected to the local budgets) bases were substantiated.
Conclusion. The local budgets’ tax revenues efficiency is the prerequisite for the economic development of the administrative units. The taxes’ fiscal potential in the local budgets’ revenues system depends on the accuracy, reliability, and adaptability of these revenues’ forecasting and planning methods, the development level of the main financial institutions, the quality of tax administration, etc. The forecast reliability should be evaluated at the all stages of the budget process, considering the forecast indicators’ performance as well as the statistical estimation of the scientific prediction error. The methodology for defining and assessing the tax bases (in particular for property taxes) requires development and essential improvement in the appropriate information and analytical support.
Keywords: local budgets, tax revenues, fiscal efficiency, tax administration, tax revenues’ forecast.
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