On September 29, the first meeting of the joint
working group of key Ukrainian ministries, including the Ministry of Finance, and
international donors on fiscal decentralization was held. The joint working
group shall act as a permanent platform for technical consultations on the
financial and budgetary aspects of the decentralization reform in Ukraine
between the international donors of Ukraine, Ministry of Finance, Ministry for
regional development and building as well as other Ukrainian ministries.
The core task of the Joint working group is to
coordinate technical aid provided by the donors who are cooperating with the
central government and municipal bodies on the development of local
self-government and on the build-up of the contact network between the central
budgets and local budgets. This working group will be an integral part of the
comprehensive coordination mechanism for the reforms and donors’ aid in Ukraine
and will be operating as one of specialized working groups under the National
Council for Reforms and jointly with other key ministries. Within this platform
priorities and strategic tasks on the fiscal decentralization will be
coordinated and technical projects for their implementation will be developed
and supported.
Fiscal decentralization is one of the reforms whose
principles and core activities were set in the Coalition Agreement, working
program of the Cabinet of Ministers and the Sustainable Development Strategy
«Ukraine 2020». They have already been implemented as comprehensive amendments
to the Budget and Tax Codes of Ukraine. These first steps have already
contributed to the modernized approach of horizontal budgetary equalization as
well as to the increased revenue base of local self-government. Also, new local
taxes have been introduced; the system of municipal loans has been liberalized.
New priorities related to the enhancement of the
interbudgetary relations and the revenues of local self-government demand a new
agenda. At the current stage, the key task is to improve the new implemented
regulations and to prepare the financial architecture for the expected changes
of the administrative and territorial system of Ukraine as well as for changes
in the management of key sectors which are funded by the local budget –
education, healthcare, social welfare. The Joint working group has already started
consultations to coordinate these priorities and issues which require technical
aid from the donors.
The meetings of the Joint working group are expected
to be held on monthly basis. Additional meetings on certain issues are also
possible.
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