Kozhalina N. Formation and development of local finances in the context of strengthening the financial security of Ukraine.

The dissertation is devoted to justifying of theoretical principles and scientific methodological approaches and the creation of recommendations for formation and development local finance in conditions of strengthening the financial security of Ukraine. The work develops the essential approaches to the definition of local finance and local budgets; the systematization of the peculiarities their formation and development was conducted; their current state of functioning was investigated; the foreign experience of forming local finance was analyzed in order to apply certain aspects in the budget system of Ukraine. Legislative functioning of local finances is revealed, attention is focused on the mechanism of formation of revenues of local budgets, in particular tax revenues in the form of local taxes and fees. It is stressed that the financial basis for the functioning of local budgets is the formation of their revenue side with the appropriate division of incomes necessary for the performance of their own and delegated powers, as well as analysis of the main components of the revenue part of local budgets. It was established that official transfers are a significant part of the revenues, and ways of reducing their size are investigated by increasing their own revenues. The system of indicators for assessing the level of region financial security was proved and their limits were defined, with a view to possible influence on the financial security of the state. The scientific-methodical approach for improving the formation of local budgets in the context of strengthening financial security of Ukraine was offered. The essence of it is to reduce the level of financial dependence local governments on central government agencies, to search for additional own sources of revenue, to build an improved institutional model of governing bodies of the united territorial community and to reform the mechanism of intergovernmental fiscal relations. The necessity of modernization the main component of local government finances during decentralization of financial resources has been proved. The main risks and weaknesses of budget decentralization were determined on the basis of research socio-economic development in regions, actual problems of administrative and territorial reforms, tax and budget legislation. As part of the reform of the taxation system an algorithm for further reforms in this direction has been formed. This algorithm was integrated with proposals for the implementation of appropriate reforms and the introduction of improved metric of financial stability of local budgets. In order to search additional sources of own revenues local budgets, it was substantiated to introduce a budget allocation norm for VAT, which will help reduce the amount of intergovernmental transfers and significantly increase the financial autonomy of local budgets, thus giving more self-financing to local governments. Key words: local finance, local budgets, local governments, budget decentralization, financial resources, local budgets revenues, local budgets expenditures.