State Budget 2022: The Ministry of Finance held Budget Consultations with Local Governments

The budget consultations at the Ministry of Finance were held with the representatives of Ukrainian associations of local self-government within the framework of the preparation of the Draft State Budget 2022 and following the Law of Ukraine "On the Associations of Local Self-Government". The First Deputy Minister of Finance Denys Uliutin and Deputy Minister of Finance Roman Yermolychev took part in this meeting.

They talked about a mechanism to ensure inter-budgetary relations in the Draft State Budget-2022 and the main approaches to the distribution of inter-budgetary transfers.

Thus, according to Denys Uliutin, due to the forecasted economic growth, the revenues of local budgets in 2022 are projected to increase by 16.2% or by UAH 57.6 billion in comparison with 2021. At the same time, the revenue side of local budgets in January-July this year amounted to almost UAH 190 billion, which is 121% more (+ UAH 33.0 billion) compared to the same period in 2020. The main budget revenue-generating tax for local budgets is personal income tax, which was UAH 115 billion (+ UAH 19.3 billion or 120% compared to January-July 2020).

The formation of relations between the state budget and local budgets in 2022 will take into account changes in the administrative-territorial structure of Ukraine, transfer policy will remain unchanged.

In particular, Denys Uliutin stressed: "The total amount of inter-budgetary transfers are provided for 1,463 local budgets, which are 24 regional budgets and the budget of the city of Kyiv, as well as 1,438 budgets of territorial communities."

Roman Yermolychev said that the significant attention of local governments as founders of educational institutions requires the effective use of educational subventions. In particular,  balances are accumulated annually in the accounts of local budgets and are not allocated for the development of education and improving its quality. As of 01.08.2021 such funds in local budgets amount to UAH 7.7 billion.

In addition, the Deputy Minister noted the execution of the powers of the founders of health care institutions in terms of monitoring the level of remuneration of health workers, which within the autonomy is set by the heads of these institutions.

"I would like to thank representatives of local authorities for productive dialogue. After all, only by working together we can build the most effective model of inter-budgetary relations and ensure the proper quality of educational and medical services in the community" - summed up Roman Yermolychev.

Additional information
According to Article 37 of the Budget Code, the Cabinet of Ministers should pass a law on the State Budget of Ukraine and submit it together with relevant materials to the Parliament and the President of Ukraine not later than the 15th of September.