Economics and Business Management

Financial support for rural development in territorial communities

Y. Lanchenko, V. Ivchenko, O. Nosikov
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Abstract

The study aimed to identify the peculiarities of the functioning of the system of financial support for rural territorial communities and to assess its ability to ensure rural development in the context of new managerial and economic challenges. The research methodology was based on an analysis of the dynamics of rural communities’ revenues in 2021-2024, the structure of local budget revenues, capital expenditures, and off-budget financing. The study found that the total revenue of rural communities increased from 29.0 billion UAH in 2021 to 40.4 billion UAH in 2024. In 2023, the average amount of local taxes and fees per capita reached 2530.6 UAH, which exceeded the figure for 2021 (2190.4 UAH), and according to the analysis of 1331 communities, in 2024 it was approximately 8183 UAH (excluding transfers). In 2024, personal income tax (36.3%) and local taxes (12%) accounted for the bulk of revenues, while the share of intergovernmental transfers remained high at around 38%. Capital expenditures also increased: in 2024, the average amount of such expenditures was 2075.8 UAH per capita. Extra-budgetary resources were noted to be substantial: more than 5,000 entrepreneurs received loans worth over 20 billion UAH, and dozens of grant projects were implemented in communities in at least six regions. The findings of the study confirmed that financial flexibility, strategic planning, effective administration of local taxes and attraction of external resources are key factors in the stable development of rural communities even in times of crisis. The results of the study can be used by local governments to improve budget planning mechanisms, increase the financial independence of communities and attract additional resources for sustainable rural development

Keywords

investment; income; tax; budget; strategic planning; rural development; entrepreneurship

Suggested citation
Lanchenko, Y., Ivchenko, V., & Nosikov, O. (2025). Financial support for rural development in territorial communities. Economics and Business Management, 16(2), 118-133. https://doi.org/10.31548/economics/2.2025.118
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