Experts of the U-LEAD with Europe Programme and the SKL International project analysed the state of implementation of local budgets over January-April 2019.

During January-April 2019, the revenues to the general fund of local budgets of Ukraine (excluding interbudgetary transfers) amounted to UAH 84.1 billion, which is 33.0% of the approved annual plan, taking changes into account.

Compared to the same period in 2018, receipts have risen nominally by UAH 14.9 billion or by 21.5%. Revenue growth rates are somewhat lower in the current year – in the same period of 2018, compared to 2017, the growth rate of revenues was 22.5%.

The personal income tax (PIT) remains largest fiscal source of local budgets.

An important source of local budget revenues is the land payment, which is part of the property tax and is one of the local taxes. In the reporting period, local budgets received UAH 10.2 billion of land payments, which by 23.6% (or UAH 1.9 billion) exceeds the revenue for the same period in 2018 (in 2018, the increase in land payment was only 1.2%).

Significant share in the structure of local budgets belongs to the single tax inflow. Its sum amounted to UAH 11.8 billion, which is 23.3% higher than last year's revenues and amounts to 14.0% of the total revenues of the general fund of local budgets.

The excise tax collection in January-April 2019 amounted to UAH 4.2 billion, which is only 3.5% higher than its inflow in 2018.

In 2019, 806 amalgamated hromadas (taking into account 24 cities of oblast importance that adjoined hromadas) have direct interbudgetary relations with the state budget. In January-April 2019, the AH general fund revenues (excluding transfers from the state budget) amounted to UAH 11.5 billion.

In 665 AHs, that had direct interbudgetary relations in 2018 (regarding which there is a correct comparative base), revenues in January-April 2019 amounted to UAH 7.0 billion, which is 19.3% more than last year's figure.

The total population living in AHs is 8315.3 thousand people.

Total expenditures of local budgets in January-April 2019 amounted to UAH 163.5 billion, which is UAH 9.7 billion less than the sum spent for the same period in 2018.

Interbudgetary transfers. During January-April 2019, local budgets received transfers from the state budget totaling UAH 86.6 billion (for the same period in 2018, the amount of transfers to local budgets amounted to UAH 115.8 billion, including subventions for social protection of the population – 65.1 billion), in particular:

• basic subsidy – UAH 3.4 billion (which is 3.9% of the amount of transfers received by local budgets);

• healthcare subvention – UAH 18.6 billion (which is 21.5% of the amount of transfers received by local budgets);

• educational subvention – UAH 21.1 bellion (which is 24.4% of the amount of transfers received by local budgets);

• subventions for social protection of the population – UAH 36.6 billion (which make up 42.3% of the amount of transfers received by local budgets);

• additional subsidy for the maintenance of educational and medical institutions – UAH 5.0 billion (representing 5.8% of the amount of transfers received by local budgets);

• all other transfers to local budgets in aggregate make up only 2.1% of the total volume of interbudgetary transfers of local budgets.

UAH 2.3 billion of reverse subsidy were transferred to the state budget from local budgets.

Thus, the main volume of interbudgetary transfers from the state to local budgets is directed at social protection of the population, education and healthcare. At the same time, educational subvention occupies the largest share of transfers in the AH budgets. 99% of all expenditures of rayon budgets, on the territory of which all hromadas have switched to direct interbudgetary relations, are directed to social protection of the population. That is why reviewing the powers and sources of rayon councils and rayon administrations is extremely relevant.

The materials were prepared by Viktor Ventsel and Yulia Sybirianska, experts of the U-LEAD with Europe Programme, as well as Ihor Gerasymchuk, expert of the SKL International project, on the basis of data from the Ministry of Finance of Ukraine and the State Treasury of Ukraine.

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