THE ROLE OF TAX POTENTIAL IN THE DEVELOPMENT OF LOCAL GOVERNMENT IN UKRAINE

Анотація

Introduction. At the present stage of development of Ukraine’s economy, the need to equalize territorial disparities in the financial support of territorial communities is especially relevant. The implementation of the policy of decentralization in the context of the formation of financial resources of local self-government increases the importance of tax and budgetary levers in the process of socio-economic development of administrative-territorial entities. In this aspect, the tax potential of local governments as a priority element of regional fiscal policy plays an important role. The ability of public authorities and local governments to transform the tax base into tax revenues gives them the opportunity to perform their functions, in particular to influence the financial and economic processes in society.

The purpose of the article is to determine the features of the formation and effective use of tax potential in the development of administrative-territorial units at the present stage.

Results. The urgency of the problem of financial support for the activities of local governments in Ukraine is outlined. The role of local governments in building tax potential for effective fiscal regulation of socio-economic development of territorial entities has been studied. Topical aspects of formation of budgetary resources of municipalities in the Ukrainian and European practice are covered. The dynamics and structure of actual performance indicators of the revenue side of local budgets in Ukraine are analyzed. The role of tax revenues in the financial resources of territorial communities has been growing. The component formation of tax capacity of local budgets in Ukraine was monitored. Considerable attention in the article is paid to risks and threats of fiscal nature that affect the effective development of local self-government. Among them are the shadow economy and pandemic processes (COVID-19). Ways to increase the tax base of territorial communities are systematized. The importance of tax potential in the socio-economic, technical and environmental development of local governments in Ukraine is proved.

Perspectives. Further research will focus on current aspects of the formation of the tax capacity of territorial communities in the languages of tax reforms on the basis of fiscal federalism and decentralization.