On September 29, the first meeting of the Fiscal Decentralization Task Force of key Ukrainian ministries, including the Ministry of Finance, and international donors was held. The Fiscal Decentralization Task Force 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 Fiscal Decentralization Task Force 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 Fiscal Decentralization Task Force has already started consultations to coordinate these priorities and issues which require technical aid from the donors.
The meetings of the Fiscal Decentralization Task Force are expected to be held on monthly basis. Additional meetings on certain issues are also possible.