Assessment Of Budget And Tax Security Of Municipilaties

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).

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.

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