Financial Foundations of Local Self-Government in the Russian Federation

This article examines the issue of increasing local budget revenues as a necessary condition for improving the efficiency of municipalities in the Russian Federation. In most municipalities in our country, their own tax and non-tax revenues constitute a small portion of local budget revenues, which is explained by the relatively high degree of centralization of the domestic financial system. Local taxes and the standard deductions from the corresponding federal and regional taxes received by lower-level budgets cannot ensure the complete self-sufficiency of local self-government. Moreover, existing financial resources are sufficient, at best, only to "plug holes," while the issue of a development budget remains unaddressed. There is an urgent need to reformat the entire system of financial support for the competence of municipal government, which requires a fundamentally different methodological approach. The subject of this scientific study necessitated an examination of current federal legislation, as well as the practice of its application, in order to identify a set of problems in the context of the effective financial support for the implementation of local self-government powers. Furthermore, scientific works by Russian and foreign authors touching on various aspects of the problem under consideration are analyzed. The methodological basis for the study included logical, formal-legal, comparative-legal, analytical, and systemic approaches. Clearly, municipalities should have their own comprehensive tax and non-tax sources of local budget revenue. This includes increasing (or establishing) the standards for deducting certain federal taxes (personal income tax, corporate tax, etc.); making such taxes as the mineral extraction tax, etc., local. It is also necessary to develop differentiated standards and methods for calculating the amount of subsidies to equalize the budgetary capacity of municipalities, taking into account their type, population size, climate, remoteness, and transportation accessibility.

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