Abstract
Reforms of local governments required new methods for generating and using financial resources of local budgets and ensuring financial security and sustainability. Financial and economic independence and fiscal security of municipalities are required for financial centralization. Currently, local governments do not have financial independence due to the increasing level of dependence of municipalities on financial assistance from regional and federal budgets. To ensure the effective socio-economic development of municipalities, improve the quality of services provided to the population, local bodies must have a sufficient amount of own financial resources. Therefore, there is a need to assess the financial and budgetary security and sustainability of municipalities. Thus, the relevance of the study is due to the need for a comprehensive scientific analysis of financial security of municipalities, identification of factors that contribute to the loss of financial security in order to select and justify measures that counteract this trend. The most important component of the financial security of local budgets is the fiscal system that affects the financial stability of budgets and the ability of local bodies to perform their functions. The paper analyzes internal and external threats to the financial and budgetary security of the Lebyazhievsky district, Kurgan region. A quantitative assessment of the budgetary and tax security is carried out taking into account six indicators and their comparison with the threshold values. Measures to improve the level of financial and budgetary security of the district are proposed and economically substantiated.
Keywords: Budget, fiscal potential, municipality
Introduction
Currently, local governments depend on the financial assistance from the federal and regional budgets (Nikulina & Sinenko, 2013). The degree of socio-economic development of local budgets, the quantity and quality of services provided to the population and companies depend on the available financial resources (Zimniakova, 2015). It is necessary to study the problem of financial and budgetary security of municipalities (Perko & Grudinova, 2011). The relevance of the research topic is due to the importance of financial and budgetary security of municipalities, factors affecting an increase in its level, and measures that can prevent negative trends (Kuklin & Agarkov, 2007).
Problem Statement
Fiscal security is one of the most important components of the economic and financial security of a country, region or municipality, which makes it possible to ensure their uninterrupted functioning (Tarasova & Roznina, 2020). Fiscal security consists of two interrelated parts (tax security and budget security). Fiscal security implies a fiscal policy aimed at ensuring the sustainable economic growth, the accumulation of all budget revenues, financial support for commodity producers, and the implementation of a social policy that improves the living standards. Tax security implies the existence of a tax system that helps to stimulate producers to improve their competitiveness and competitiveness of their products and keeping the tax burden at an acceptable level.
Research Questions
Fiscal security is a state of security of the budget system, centralized and decentralized funds of the federal and local authorities, capable of effectively responding to external and internal negative threats in any conditions of economic development, ensuring the socio-economic development, protection of economic interests of the individual, society and the country (Roznina et al., 2020). The level of fiscal security of municipalities is based on the tax and non-tax revenues. To identify the dynamics of the Lebyazhievsky budget, an analysis of the tax and non-tax revenues was conducted, and fiscal security was assessed using six indicators. The indicators were then compared with the threshold values.
Purpose of the Study
The purpose is to assess the level of financial independence of the local budget from external sources of funding, the independence and balance of the budget, as well as the effective redistribution of financial resources, both for current needs and socio-economic development of the territory in order to develop measures aimed to improve the level of fiscal security.
Research Methods
The following methods were used: the statistical research method was used in collecting and summarizing quantitative data and identifying patterns of change in indicators that contribute to the assessment of the budgetary and tax potential of the municipality; the comparative method was used for comparing indicators of the base year with the ones of reporting year and standard values.
Findings
Threats to the budgetary and tax security of municipalities are a set of conditions, processes and factors that form the asymmetry of financial resources and violate financial independence (Vinnichenko & Esmanov, 2014).
Potential threats to the fiscal security of municipalities
Consider the fiscal security threats presented in Table 01.
Fiscal security threats are factors and conditions that affect the generation of financial resources and the need for them for implementing the socio-economic policies by local governments (Yusupov et al., 2019).
Assessment of Threats to Fiscal Security of the Lebyazhievsky District
The authors assessed the level of budgetary and tax security of the Lebyazhievsky district, Kurgan region. The fiscal security of a municipality is characterized by indicators of budget revenues and fiscal potential (Temirbolatova, 2020). The budget depends on the amount of taxes collected. They constitute the revenues of the budgetary part and form financial relations of the government with companies and individuals (Bochko, 2016). An analysis identified four main threats.
In 2017, the budget revenue base was not fully executed by 0.008% (in terms of tax and non-tax revenues - by 0.03%). In 2019, the shortfall in the total amount of revenues was 0.03, and for tax and non-tax revenues, it was 0.024 (Table 02).
A decrease in the amount of profit tax by 430 thousand rubles, goods sale tax - by 260 thousand rubles, national tax - by 243 thousand rubles, service provision income tax - by 516 thousand rubles, federal and municipal property use income tax - by 694 thousand rubles (Table 03).
Free transfers took the largest share of revenues (89.58% in 2019), which indicates a low level of independence of the municipality.
Reduced percentage of execution of the consolidated budget in terms of expenditures by 2.96%, (96.65% in 2019).
Criteria for assessing the fiscal security of Lebyazhvsky district
An insignificant amount of own revenues in the budgets of municipalities, their imbalance, an insignificant level of socially significant expenses in their total amount reflect the low level of the state of local budgets (Olkhovik, 2019; Smagulova, 2010; Voroshilov & Gubanova, 2014).
The system of indicators characterizing the level of budgetary and tax security of the Lebyazhievsky district is presented in Table 04.
Assessment of the budgetary and tax potential showed the critical level of its state. The municipality cannot cover all expenses with its own funds. The social sphere is not a priority for financing.
To increase the level of the budgetary and tax potential, two measures have been proposed, including the measure aimed to increase the personal income tax. The budget income of the municipality can be increased by 0.65 thousand rubles. In addition, it is necessary to reduce the expenditure by 8.33 thousand rubles through the implementation of the energy saving system. Assessment of the budgetary and tax potential of the Lebyazhievsk municipalityis presented in Table 05.
The proposed measures will strengthen the financial and budgetary security of the Lebyazhievsky District, which is confirmed by the positive dynamics of the budgetary and tax potential indicators.
Conclusion
The financial situation in the Lebyazhievsky district is unstable. Financial and budgetary security is closely related to the economic crisis (Medvedeva et al., 2019). Crisis phenomena in the whole world and in the country affect the level of the budgetary and tax potential of the municipality. To minimize the financial risks, it is necessary to develop and implement measures aimed to minimize negative trends and improve the sustainability of development of territories.
References
Bochko, V. S. (2016). Economic independence of regions in the context of the new reality. Economy of the region, 12(2), 342-358.
Kuklin, A. A., & Agarkov, G. A. (2007). The optimal ratio of economic and administrative measures to counteract the shadow economy of the regions. Economy of the region, 1, 54-59.
Medvedeva, T. N., Artamonova, I. A., Baturina, I. N., Farvazova, E. A., Roznina, N. V., & Mukhina, E. G. (2019). On the distribution mechanism of green box subsidies. IOP Conference Series: Materials Science and Engineering, 341, 012010.
Nikulina, N. L., & Sinenko, A. I. (2013). Diagnostics of the financial security of the region. Manager, 4(44), 54-59.
Olkhovik, V. V. (2019). Opportunities for the development of the tax potential of the constituent entities of the Russian Federation. Economy of the region, 938-951.
Perko, N. V., & Grudinova, I. A. (2011). Formation of a budgetary strategy as the most important element of effective management in the field of ensuring the financial and budgetary security of the region (municipality). Bulletin of the Financial University, 3(63), 47-50.
Roznina, N. V., Karpova, M. V., Dunicheva, S. G., & Ovchinnikova, Yu. I. (2020). Assessment of the administration's activities in the formation and execution of the budget. In Digital economy and knowledge management: problems and development prospects: collection of scientific papers of the International Scientific and Practical Conference (pp. 158-168). Publishing house of the Vyatka State Agricultural Academy.
Smagulova, T. M. (2010). Method of estimation of investment appeal of region. Тhe Economic science, 4, 117-119.
Tarasova, G. V., & Roznina, N. V. (2020). Analysis of the budget of the Makushinsky district in 2019-2020. In The first stage in science: materials of the VII international scientific and practical student conference (March 24, 2020). (pp. 129-132). Publishing house of the Vologda State Dairy Academy named after V.I. N.V. Vereshchagin.
Temirbolatova, S. K. (2020). Regional investments and directions of investment policy. Business. Education. Right, 1(50), 235-240.
Vinnichenko, N. V., & Esmanov, A. M. (2014). Assessment of the state of financial security in Ukraine. Ekonomichny chasopis-XXI, 3-4-2, 47-51.
Voroshilov, N. V., & Gubanova, E. S. (2014). Assessment of the level of socio-economic development of municipalities in the Vologda region. Economic and social changes: facts, trends, forecast, 6(36), 54-69.
Yusupov, K. N., Yangirov, A. V., Timiryanova, V. M., & Toktamysheva, Yu. S. (2019). Assessment of the impact of territorial location on the development of municipalities. Economy of the region, 15(3), 851-864.
Zimniakova, T. S. (2015). Certain aspects of the financial security of the region on the example of the krasnoyarsk territory (krai). Journal of Siberian Federal University. Humanities and Social Sciences, 8(11), 2385-2397.
Copyright information
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
About this article
Publication Date
01 February 2022
Article Doi
eBook ISBN
978-1-80296-123-2
Publisher
European Publisher
Volume
124
Print ISBN (optional)
-
Edition Number
1st Edition
Pages
1-886
Subjects
Land economy, land planning, rural development, resource management, real estates, agricultural policies
Cite this article as:
Roznina, N. V., Karpova, M. V., Borovinskikh, V. A., Shulgina, A. V., & Volkova, A. V. (2022). Assessment Of Budget And Tax Security Of Municipilaties. In D. S. Nardin, O. V. Stepanova, & E. V. Demchuk (Eds.), Land Economy and Rural Studies Essentials, vol 124. European Proceedings of Social and Behavioural Sciences (pp. 715-721). European Publisher. https://doi.org/10.15405/epsbs.2022.02.89