Olexandr Sych: The largest source of funds economizing is decentralization of budgets

The adoption of a Government's package of tax and budget changes will help to stabilize the situation within the country as well as to optimize the mechanisms of distribution of state funds, which the state budget loses resulted from the occupation of certain areas of Ukraine. The largest resource of optimization of expenses is decentralized budgeting.

This was stressed by Vice Prime Minister of Ukraine Oleksandr Sych during the live broadcast program on channel 112 Ukraine, on October 13, 2014.

According to the Vice Prime Minister, the Government's offered changes to provide local authorities with substantial rights to form local budgets. "Decentralization means providing local authorities with more powers. But without resources the powers do not make sense. In fact, we are talking about the resuming of powers of local authorities as they were back in 1997, when the district and regional councils were deprived of the right to form their own executive bodies. Today, the recovery of this right should be intensified also by resources through making appropriate changes into the budget and tax legislation, when a possibility to remain 60 % tax revenues will arise, and another one is to introduce new taxes," the top official said.

Oleksandr Sych noted that such innovations in budgeting area will require from local communities as well a new level of management interaction and public control. "Decentralization in forming and use of budgets can radically improve the situation in the regions and the country in whole. But only if the balance between the new powers in this area and a slightly different level of responsibility, professionalism and quality of government is preserved," said Oleksandr Sych.