On 26 February 2026, a round table discussion ‘Communities and Tax Administration: From Initiative to Joint Decisions’ was held in Kyiv, organised by the All-Ukrainian Association of Amalgamated Territorial Communities with the support of the Polaris Programme and the assistance of the U-LEAD with Europe Programme.
The round table provided a space for open discussion on communities' readiness to move beyond their role as passive recipients of tax revenues and take on some of the powers of a full-fledged administrator. The event was attended by members of parliament, representatives of the Ministry of Finance of Ukraine, the Ministry of Community and Territorial Development of Ukraine, the Ministry of Digital Transformation of Ukraine, and community leaders. The discussion focused on how tax policy and digital transformation tools can work together to achieve a common goal: economic sustainability for communities.
Opening the discussion, Taras Dobrivskyi, Executive Director of the All-Ukrainian Association of Amalgamated Territorial Communities, emphasized the importance of tax administration for community development: "I sincerely hope that through our joint efforts, we will be able to address issues that concern communities and replenish their budgets. This is necessary in order to work effectively for the people and the welfare of our country. The Association is systematically working to find ways to increase revenues from local taxes and fees."
Polaris Programme expert Ihor Herasymchuk presented a systematic vision for expanding the role of local self-government bodies in the administration of local taxes – from conceptual approaches to specific legislative changes. He presented the results of the working group created by the All-Ukrainian Association of Amalgamated Territorial Communities, which included community representatives, Polaris Programme experts, and relevant specialists. The results of the work included a comprehensive analysis of legislation and a survey of local self-government bodies, as well as a list of functions that could be delegated to communities in the field of local tax administration. In addition, relevant amendments to the Tax Code and other regulatory acts were prepared.
The key focus of the presentation was the so-called ‘soft model’ of community participation in tax administration. It provides for the state tax service to retain its control functions, while strengthening the role of communities in data verification, registry work, analytics and communication with taxpayers. This approach avoids excessive personnel and financial burdens on communities, reduces the risk of conflicts and increases the efficiency of administration.
Special attention was paid to intermunicipal cooperation as a tool for strengthening community capacity. This involves the joint use of digital solutions, the creation of service centres and the consolidation of expert capacity, which is particularly relevant for small communities. An important component of the model is the digitalisation of processes: integration with government services, automatic notification of taxpayers, the possibility of quick payment, and open data. This creates a new quality of interaction – from control to service.
According to experts, the implementation of the proposed approaches could ensure a significant increase in local budget revenues – up to 15–30% – by updating data, bringing objects out of the ‘shadow’ and working more effectively with debtors.
Mykola Rubchak, Director of the Multilevel Governance Department at the Ministry of Community and Territorial Development of Ukraine, presented details of an experimental project initiated by the ministry that will allow local communities to voluntarily participate in certain functions related to the administration of local taxes and fees.
Participation by communities is strictly voluntary, and cooperation between local self-government bodies, the State Tax Service and the state will be formalised through relevant agreements. The aim of the experiment is to test the readiness of communities to take on a more active role in tax administration without changing the basic status of tax authorities.
According to Mykola Rubchak, a preliminary list of communities that are potential participants in the experiment has already been drawn up. At the same time, other communities that wish to join the project will have the opportunity to do this.
The initiative of the Ministry of Community and Territorial Development of Ukraine was a logical continuation of the ongoing dialogue that the Polaris Programme has been systematically conducting with all stakeholders at the local, regional and national levels. Strengthening the capacity of communities to provide quality services is impossible without an adequate financial basis, and effective administration of local taxes is a key component of this process.
Photo: All-Ukrainian Association of Amalgamated Territorial Communities
