UDC 332.122.54:336.143; JEL H62, H77, G18, R58
Storonyanska, I. Z., & Benovska, L. Ya. (2023). Zminy u rozpodili dokhodiv vid PDFO yak vyklyk dlya systemy finansovoho vyrivnyuvannya mistsevykh byudzhetiv v umovakh viyny [Changes in the distribution of personal income tax revenue as a challenge for the system of financial equalization of local budgets in wartime conditions]. Rehional'na ekonomika - Regional Economy, 109 (3), 110-120. DOI: https://doi.org/10.36818/1562-0905-2023-3-10 [in Ukrainian].
Sources: 13

Authors



Storonyanska Iryna Zenoviyivna

Doctor of Economics, Professor

Deputy Director for Scientific Work, Head of the Department of regional financial policy of the Dolishniy Institute of Regional Research of NAS of Ukraine

Contacts: istoron.ird@gmail.com, istoron@i.ua, (032)270-7043

Webpages:

Benovska Liliya Yaroslavivna

Ph.D. of Economics, Senior Researcher

Senior Researcher, Scientific Secretary of the unit of the Department of regional financial policy of the Dolishniy Institute of Regional Research of NAS of Ukraine

Contacts: lbenovska11@gmail.com

Webpages:

Resume

In the conditions of the decrease in economic activity in the war with Russia, the personal income tax on military personnel’s allowances was a significant source of local budget revenue for many territorial communities. Its volume increased due to the increase in the number of military units and military personnel, and the increase in the level of their salaries. Such trends increased the horizontal budget imbalances. The article aims to analyze the changes in the distribution of personal income tax revenue in the context of its impact on the revenue capacity of local budgets, as well as to develop proposals for improving the system of financial equalization in Ukraine in wartime conditions. The article analyzes the local budget imbalances caused by the uneven distribution of local budget revenue from the personal income tax on military personnel’s allowances. The specifics of the equalization system in Ukraine are clarified. On the one hand, it is tied to one tax – personal income tax, on the other hand, the dependence of local budgets on personal income tax is significantly higher than in other countries. The influence of the decision to redirect personal income tax on military personnel’s allowances from local budgets to the state budget on the financial equalization system is examined, and the question of the fairness of the current equalization system in Ukraine is raised. Various options for the distribution of revenue from personal income tax on military personnel’s allowances are analyzed, and the necessity and importance of implementing the mechanism of crediting personal income tax to local budgets by place of residence, and not by place of work of individual payers, is substantiated. This mechanism is effective and works in most foreign countries. In general, there are a number of options for implementing changes to the procedure for crediting personal income tax at the place of residence of an individual payer. The use of such experience makes it possible to develop one’s own version.

Keywords:

equalization system, territorial communities, local budgets, personal income tax, war

References


1. Kyrylenko, O. P. (2000). Mizhbyudzhetni vidnosyny: stan ta problemy vdoskonalennya [Intergovernmental budgetary relations: the state and problems of improvement]. FinansyUkrayiny – Finance of Ukraine, 6, 64-72. [in Ukrainian].
2. Oparin, V. M. (2015). Dominanty ta priorytety finansovoho vyrivnyuvannya v Ukrayini [Dominants and priorities of financial equalization in Ukraine]. Fіnansy’ Ukrayiny – Finance of Ukraine, 6, 29-43 [in Ukrainian].
3. Piontko, N. B. (2015). Zarubizhni modeli finansovoho vyrivnyuvannya ta perspektyvy yikh uprovadzhennya v Ukrayini [Foreign models of financial equalization, prospects for implementation in Ukraine]. Biznes Inform – Business Inform 9, 43-54. [in Ukrainian].
4. Pysmennyy, V. V. (2017). Mizhbyudzhetni transferty yak instrument finansovoho vyrivnyuvannya terytoriy [Intergovernmental transfers as aninstrument for financial equalization of territories]. Ekonomika ta derzhava – Economy and the state, 6, 24-30. [in Ukrainian].
5. Piddubnyy, I., Tytyuk, S., & Darkovich, A. (2023, Sep 19). A «Viys'kovyy» PDFO: yak mozhe zminytysya systema spryamuvannya podatku ta do choho tse pryzvede [«Military» tax on personal income: how the system of tax distribution can change and what it will lead to]. VoxUkraine: Website. Retrieved from https://voxukraine.org/vijskovyj-pdfo-yak-mozhe-zminytysya-systema-spryamuvannya-podatku-ta-do-chogo-tse-pryzvede [in Ukrainian].
6. Slobozhan, O. (2023, Aug 31). Viys'kovyy PDFO: «Khiba revut'voly, yak yaslapovni?» [Military personal income tax: Do the oxen roar like the manger is full?]. Zn.ua: Website. Retrieved from https://zn.ua/ukr/ECONOMICS/vijskovij-pdfo-khiba-revut-voli-jak-jasla-povni.html [in Ukrainian].
7. Vitaliy Bezhin proponuye zminyty formulu narakhuvannya «viys'kovoho» PDFO [Vitaliy Bezgin proposes to change the formula for calculating the «military» personal income tax] (2023, Jul 18). Decentralization: Website. Retrieved from https://decentralization.gov.ua/en/news/16905 [in Ukrainian].
8. Hanushchak, Yu. (2023, Sep 10). Fiskal'na reforma ta PDFO viys'kovykh: chomu mistseva vlada ta Kabmin mayut' sisty za stil perehovoriv [Fiscal reform and personal income tax of the military: why local authorities and the Cabinet of Ministers should sit down at the negotiating table]. Zn.ua: Website. Retrieved from https://zn.ua/ukr/POLITICS/fiskalna-reforma-ta-pdfo-vijskovikh-chomu-mistseva-vlada-ta-kabmin-majut-sisti-za-stil-perehovoriv.html [in Ukrainian].
9. Kostyrko, L. A., &Valenteychyk, N. Yu. (2016). Mekhanizm rehulyuvannya mizhbyudzhetnykh vidnosyn v Ukrayini: priorytety, instrumenty, perspektyvy [The mechanism of regulation of inter-budgetary relations in Ukraine: priorities, tools, prospects]. Syevyerodonetsk: Volodymyr Dahl East Ukrainian National University. [in Ukrainian].
10. Storonyanska, I. Z., &Benovska, L. Ya.(2018). Modeli finansovoho vyrivnyuvannya: svitova praktyka [Financial equalization models: world practice]. FіnansyUkrainy – Finance of Ukraine, 6, 58-74. DOI: https://doi.org/10.33763/finukr2020.02.025 [in Ukrainian].
11. Storonyanska, I. Z., & Benovska, L. Ya. (2020). Osoblyvosti finansovoho vyrivniuvannya rozvytku terytoriy v umovakh byudzhetnoyi detsentralizatsiyi [Тhe peculiarities of financial equalization of the development of territories in the conditions of budgetary decentralization]. FіnansyUkrainy – Finances of Ukraine. 2, 25-37. DOI: https://doi.org/10.33763/finukr2020.02.025 [in Ukrainian].
12. Mistsevi byudzhety [Local budgets] (2022). OpenBudget: Website. Retrieved from https://openbudget.gov.ua [in Ukrainian].
13. Storonyanska I., Z.(Ed.) (2019). Stale endohenne zrostannya rehioniv Ukrayiny v umovakh detsentralizatsiyi [Sustainable endogenous growth of the regions of Ukraine in conditions of decentralization]. Lviv: SU «Institute of Regional Studies named after M. I. Dolishniyof NAS of Ukraine. [in Ukrainian].