On 12 May, a regional forum ‘Fiscal decentralisation and hromadas capacity: the regional level – Vinnytsia Oblast’ was held in Vinnytsia, organised by the Polaris Programme ‘Support for Multilevel Governance in Ukraine’ in cooperation with the Vinnytsia Regional State Administration. The forum was a platform for open dialogue on the fiscal sustainability of hromadas, the role of personal income tax in shaping local budgets, and the challenges currently facing local self-government in the context of full-scale war.
The event brought together representatives of hromadas, state and municipal authorities, associations of hromadas, experts and international partners. Discussions focused on the implementation of local budgets, support for social infrastructure, inter-municipal cooperation and finding solutions to strengthen the capacity of hromadas.
Opening the Forum, Susanna Dellans, Team Leader of the Polaris Programme and Representative of SALAR International in Ukraine, noted that the fiscal capacity of hromadas today has a direct impact on the quality of services provided to people and the stability of the state as a whole: “The fiscal capacity of hromadas is not merely a technical issue. It is a question of our collective strength, our ability to provide people with quality services, decent living conditions and confidence in the future." She also underlined that for the Polaris Programme, the regional level and direct dialogue with hromadas form the basis for shaping effective national policies.
Serhii Zditovetskyi, First Deputy Head of the Vinnytsia Regional State Administration, said that under martial law, the stability of local budgets and the timely funding of protected expenditure remain among the key priorities for the state and hromadas: “Despite complex security and economic challenges, the region’s fiscal system is demonstrating resilience, and hromadas are taking a responsible and measured approach to the formulation and implementation of budgets.”
Anatolii Tkach, Deputy Head of the Vinnytsia Regional Council, noted that today the concept of a hromadas fiscal capacity has a much broader meaning than simply budgetary indicators: “It is not just about the figures in reports or the balances in accounts. It is our ability to support the armed forces, repair shelters on time, and provide light and heat in our residents’ homes.” According to him, as part of last year’s regional ‘Safe and Sustainable hromadas’ competition, hromadas in Vinnytsia Oblast donated around 60 million hryvnias to support the Armed Forces of Ukraine.
One of the key parts of the Forum was the presentation of an analysis by the Polaris Programme on the sustainability of local fiscal system and the implementation of hromadas budgets. The Programme’s experts, Ihor Onyshchuk and Ihor Herasymchuk, presented the results of their research and budgetary analysis, which revealed significant imbalances between different types of hromadas in the region.
In particular, almost 89% of urban hromadas in Vinnytsia region have a high or optimal level of fiscal sustainability, whereas only 39% of rural hromadas demonstrate a sufficient level of capacity. According to the experts, this confirms the need for additional support and equalisation mechanisms for less capable hromadas.
Special attention was paid to reforming the personal income tax allocation system. During the forum, the Polaris Programme presented a study ‘Where should personal income tax be allocated? Why Ukraine can no longer delay this reform’. Experts noted that the current system of personal income tax allocation exacerbates imbalances between hromadas, whilst a transition to a model of tax allocation based on a person’s place of residence would allow for a fairer distribution of resources across regions. The majority of forum participants supported this approach to personal income tax reform.
During the Forum, participants also discussed the results of the implementation of local budgets in the Vinnytsia region for the first quarter of 2026, funding for the social and cultural sectors, tools for strengthening the fiscal autonomy of hromadas, the importance of public investment in medium-term planning, etc.
Forum participants emphasised that fiscal decentralisation today is not merely a matter of budgetary policy, but also the foundation of hromadas resilience, their ability to provide services to people and support territorial development in wartime conditions.
