In this scientific article the composition of tax revenues in local budgets is determined. Problems of the comprehensive characteristic of tax revenues categories are diagnosed. The position of communities’ funding in the reform of administrative and territorial structure of Ukraine is investigated. Problems of providing the local communities with financial resources in the process of the territorial development are diagnosed. The ways of strengthening the financial autonomy of municipalities are grounded. The basic changes in taxation of communities concerned with the reform of local government are studied. Amendments to the Budget Code of Ukraine and the Tax Code of Ukraine in the context of the administrative-territorial reform and the reform of fiscal decentralization are analyzed. The necessity of understanding the role and place of local communities in the development of local government is argued. The place and role of providing taxes to local budgets in forming the economic and financial potential of the area are investigated. The basic tools of tax revenues formation to local budgets are defined. The interdependence between the formation of tax payments and the level of economic development of the respective administrative-territorial unit is proved. Sources of the tax revenues to local budgets and their focus on supporting the budget expenditures are shown. As part of the major sources of the budget revenues the tax on economic activity, personal income tax, consumption of public goods taxation, property tax and the use of natural resources taxation are determined. The place and role of each tax payment in financial resources of local budgets forming is analyzed. It is determined that all incomes are included to the general fund of the local budgets. Accordingly, we are not talking about their targeted use to support certain budget expenditure. The priority of formation of the expenditure policies of local governments is proved. The basic factors that influence the mobilization of revenues from taxation are analyzed, such as: the number and potential of business entities development, the level of the shadow sector extent, investment attractiveness. The necessity of achieving financial viability in order to accomplish the basic functions conferred on local authorities by the state is grounded. It is proved that the income tax is a leader in formation of financial resources of local budgets. The role of local taxes and fees in the system of tax payments to local budgets is determined. It is shown that the legislative innovations are not able to ensure decentralization. Changes to the determination and administration of tax payments to local budgets are proposed. Attention is paid to insufficient tax revenues in the financial resources of local governments. It is concluded that the community development at the local level is possible only when the correct public and local government policies are formed, basing on the fiscal capacity of communities. 

tax revenues of the local budgets, tax viability, sources of tax revenues