The Standing Committee on the Development of Local Self-Government of the Lviv Regional Council has adopted a draft appeal to the Verkhovna Rada of Ukraine and the Ministry of Finance of Ukraine on the gradual transfer of the administration of local taxes and charges to local governments.

According to the Lviv Regional Council, the initiative aims to strengthen the financial capacity of communities and provide them with more effective tools for managing their own revenues.

According to Volodymyr Kyrylych, Head of the Committee, the appeal was the result of a broad expert discussion initiated by the Lviv Regional Council.

‘The initiative was developed based on the results of a broad discussion held at the initiative of the Lviv Regional Council. Representatives of local governments, Members of the Ukrainian Parliament, local councillors, local government associations, researchers, experts, and representatives of state financial authorities joined the discussion,’ noted Volodymyr Kyrylych.

The appeal states that the current system of local tax administration does not allow to fully exploit the revenue potential of communities. According to estimates by local governments, due to inadequate administration, local budgets lose out on at least 20 per cent of property tax revenue every year.

The document also focuses on the need to:

• grant local governments access to tax information;
• ensure a quality inventory of taxable assets;
• synchronise state registers;
• improve mechanisms for dealing with tax debts.

At the same time, the authors of the appeal emphasise that the transfer of functions for the administration of local taxes should take place gradually and exclusively on a voluntary basis – in accordance with the level of organisational and staffing readiness of each community.

In the draft appeal, the Lviv Regional Council calls on the Verkhovna Rada of Ukraine and the Ministry of Finance of Ukraine to amend the Tax Code of Ukraine to create the legislative framework for the transfer of functions for the administration of local taxes and levies to local governments.