Sergii Marchenko: "The Increase in Balances of the Accounts Indicates Significant Growth in the Revenue Part of the Local budgets"

On July 3, the Minister of Finance Sergii Marchenko and the German Special Representative for Reforms in Ukraine Georg Milbradt met online to discuss the reform of the budget system in the context of the decentralization process and the introduction of a new model of interbudgetory relations.

"The increase in balances of the accounts indicates significant growth in the revenue part of the local budgets. Specialists of the Ministry of Finance work to develop appropriate amendments to the Budget Code of Ukraine to ensure the introduction of medium-term planning, both at the state and local levels. The transition to medium-term budgeting will facilitate the introduction of a proactive governance mechanism, which provides for the timely making of balanced decisions - and measures to ensure financial stability and economic growth in the medium term," - said the Minister of Finance Sergii Marchenko.

Moreover, together with Georg Milbradt, the Minister discussed achievements and challenges facing Ukraine in the field of decentralization. In particular, during the first stage of the reform several important results were achieved:
the financial capacity of local budgets strengthened;
the provision of quality public services to consumers ensured due to the expansion of expenditure powers of local governments.

Background:
In 2015-2019, local budgets (general and special funds) increased the revenue by two and a half times (general fund by almost three times, special fund by 20.5%). Transfers from the state budget to local budgets for the implementation of state-delegated powers and transfers of investment nature also increased by almost half (49.6%).

In January-May 2020, the general fund of local budgets received UAH 109.7 billion (37.5% of the annual revenues approved by local councils). The increase against the corresponding period of 2019 is + 1.6% or + UAH 1.7 billion.