Gorbaichuk L. V.

Gorbaichuk L. V. Inter-budget transfers as an instrument for financial and legal regulation of local budgets

The article analyzes the definition of the essence of the concept of «inter-budget transfers» from a scientific perspective and in accordance with the budget legislation. It found that the basic purpose of inter-budget transfers are the implementation of financial equalization to regulate the incomes of local budgets. It is shown that the concept of official transfers in domestic economic practice began to apply from 1996 simultaneously with the introduction of the new structure of budget classification of Ukraine, which was approved by the Resolution of the Cabinet of Ministers of Ukraine of July 12, 1996. Official transfers were divided into two groups – current (grants) and capital (subvention) depending on the targeted use of funds under the budget classification. Subsequently, the concept of «inter-budget transfer» was defined in the Budget Code of Ukraine of June 21, 2001, then – in the Budget Code of Ukraine of July 8, 2010 in similar redaction, such as «inter-budget transfers – resources transferred free of redemption and repayment from one budget to another one». In the context of the topic analyzed changes in the budget legislation concerning the establishment of types of interbudget transfers. It is concluded that the current budget law provides for a new system of horizontal fiscal equalization areas while incentives to increase the revenue base of the system instead of balancing the budget. Paying attention to the results of the contemporary stage of the legislative work on the improvement of the budget legislation regarding to the regulation of inter-budgetary transfers. It is shown that in the Budget committee of Verkhovna Rada of Ukraine among of 169 bills on the preparation that this committee defined as the main, 10 bills as of December 26, 2016 containing proposals for improving the use of inter-budget transfers as a tool for financial and legal regulation of local budgets. Summarized the issues on which such bills most often are initiating. The modern mechanism of inter-budget transfers, implemented through a set of instruments and a system of institutional and legal framework provides for the redistribution of financial resources between the links of the budget system and aims to stimulate socio-economic development of regions. The purpose of establishment a system of financial equalization is to ensure the effective implementation of the authority to provide public services to consumers, with a system of financial compensation form equalization transfers for delegated to local governments and local government powers. You can also conclude that the current legislation providing opportunities to improve fiscal and financial autonomy of local budgets.

Key words: budget system, inter-budget relations, inter-budget transfers, the state budget, local budgets, local government’s budgets, the Budget Code of Ukraine.

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