Fiscal Decentralization and Local Tax Policy: An Empirical Analysis of Community Self-Sufficiency in Ukraine

Article DOI: https://doi.org/10.57017/jaes.v21.2(92).08

Author(s):

Hennadii MAZUR Department of Management and Administration, РHEE “Vinnytsia Аcademy of Сontinuing Еducation”, Vinnytsia, Ukraine
Serhii SHKURAT Interregional Academy of Personnel Management, Kyiv, Ukraine
Volodymyr TSAP Department of Finance, Accounting and Taxation, Faculty of Economics and Business, Dmytro Motornyi Tavria State Agrotechnological University, Zaporizhia, Ukraine
Ihor SAMSIN Department of Constitutional, Administrative and Financial Law, Khmelnytskyi University of Management and Law, Ukraine
Oleksandr BUKHANEVYCH Department of Constitutional, Administrative and Financial Law, Leonid Yuzkov Khmelnytskyi University of Management and Law, Ukraine

Abstract:

This study evaluates the impact of local taxation on the financial self-sufficiency of territorial communities in Ukraine within the context of ongoing fiscal decentralisation. As transitional economies seek to empower local governance, the ability to generate autonomous revenue becomes a prerequisite for sustainable regional development. Utilizing a structural-empirical analysis of budget data, the research identifies the specific tax instruments, primarily property and land taxes, that most effectively drive community autonomy. The findings demonstrate a significant correlation between tax base diversification and the reduction of vertical fiscal imbalances. The study highlights the challenges posed by martial law and economic volatility, proposing a model for strengthening local fiscal resilience through digital administrative reforms and optimised tax incentive structures. The research concludes with policy recommendations for harmonising Ukrainian local tax frameworks with European standards to ensure long-term financial stability at the municipal level.

Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.

Article’s History: Received 5th of January, 2025; Revised 9th of February, 2026; Accepted 2nd of March, 2026; Available online: 30th of March, 2026. Published as article in the Volume XXI, Spring, 2(92), March, 2026.

How to cite:

Mazur, H., Shkurat, S., Tsap, V., Samsin, I., & Bukhanevych, O. (2025). Fiscal Decentralization and Local Tax Policy: An Empirical Analysis of Community Self-Sufficiency in Ukraine. Journal of Applied Economic Sciences, Volume XXI, Spring, 2(92), 529–544. https://doi.org/10.57017/jaes.v21.2(92).08

Conflict of Interest Statement: The authors declare that there are no conflicts of interest regarding the publication of this paper.

Acknowledgments/Funding: The authors did not receive any specific funding for this research.

Data Availability Statement: The data supporting the findings of this study are derived from publicly available sources, including official government and open budget databases. Additional information regarding the data and methodology is available from the corresponding author upon reasonable request.

Ethical Approval Statement: This study does not involve human participants, individual-level personal data, or experimental procedures requiring approval from an institutional ethics committee. The research is based exclusively on secondary data obtained from publicly available administrative and statistical sources, including official government and open budget databases. All data are aggregated at the level of territorial communities and do not contain any confidential or personally identifiable information. Therefore, in accordance with internationally accepted research ethics standards, formal ethical approval was not required for this study.

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