The essence and role of transfers in the system of budgetary regulation

Abstract

The article determines that intergovernmental fiscal relations are a key component of the budget system of any country. The essence of the concept of ‘intergovernmental fiscal relations’ is considered, the content of this concept is defined and substantiated, and their role in the process of budget regulation is studied. Regulation of intergovernmental fiscal relations is of particular relevance in the context of martial law. The purpose of regulating interbudgetary relations is to ensure that the expenditure powers assigned to budgets by legislative acts are consistent with the financial resources which should ensure the exercise of these powers. Intergovernmental transfers are the instrument for achieving this goal. It is proved that intergovernmental transfers in Ukraine are the main form of implementation of intergovernmental relations and are aimed at balancing and equalizing the financial capacity of the respective budgets.

  The purpose of the article is to study the theoretical foundations of the functioning of intergovernmental transfers and analyze the instrument of intergovernmental regulation. The author analyzes the dynamics of intergovernmental transfers to local budgets during 2018-2024, and also analyzes the share of official transfers from the state budget in the revenues of the Regional Budget of Volyn Oblast during 2018-2024 in terms of grants and subventions. Our analysis has shown that a characteristic feature of wartime subventions is the inability to use the remaining funds of such subventions for other purposes.

  Under the current martial law, the Law of Ukraine ‘On the State Budget of Ukraine for 2024’ and decisions on local budgets have been adapted to the current situation to stabilize the state.

  After the war is over, there will be a need to introduce new, temporary subventions to support the territories affected by the armed conflict in eastern Ukraine. At the same time, the list of local budgets that will receive this subvention should be significantly expanded, given the growing number of territories that will need support. This topic has a research perspective based on the study of optimization of intergovernmental fiscal relations.