Burkovskaya Alla, Candidate of Economic Sciences, Associate Professor of the Department of Finance, Banking and Insurance, Mykolaiv National Agrarian University, Mykolaiv, Ukraine

ORCID: 0000-0003-4158-1721
e-mail: burkovskaya@mnau.edu.ua

Slobodian Tetiana, 2nd year Master’s student, Mykolaiv National Agrarian University, Mykolaiv, Ukraine

ORCID: 0009-0008-6413-8734
e-mail: tanyaslobodian1051@gmail.com

Effective use of tax Potential of Territorial Communities

Abstract. Introduction. The effectiveness of using the tax potential of territorial communities of Ukraine in the context of decentralization and military challenges was studied. The essence of tax potential as a key factor in the financial independence of communities was revealed, and trends in its implementation were analyzed based on open budget data and research by the Kyiv School of Economics (KSE).

Purpose. To analyze the effectiveness of the use of the tax potential of territorial communities in Ukraine, identify the key factors influencing its implementation, and substantiate practical measures to improve the tax capacity of local budgets under the conditions of decentralization and military challenges.

Results. The presence of significant territorial disparities in the level of mobilization of own revenues between communities was revealed, which is due to the structure of the local economy, the level of urbanization, the quality of tax administration and the human resources potential of local governments. Special attention was paid to the impact of martial law, internal migration and reduction of the tax base on the formation of local budget revenues. Using the example of communities of the Mykolaiv region, the implementation of planned and actual indicators of income, expenditure, deficit and financing was analyzed, which made it possible to assess the level of implementation of tax potential in practice.

Conclusions. A set of practical measures to increase the efficiency of tax potential use is proposed, including improving tax administration, digitalization of tax registers, implementation of risk-based financial control, development of the human resources capacity of local financial units, and introduction of mechanisms for assessing the effectiveness of tax incentives.

Keywords: tax potential, territorial communities, local budgets, financial decentralization, tax capacity

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