FINANCIAL FOUNDATIONS FOR THE INDEPENDENCE OF LOCAL

Abstract

The article discusses modern issues connected with financial support of self-government. The Constitution of the Russian Federation guarantees the independence of local self-government, one of the guarantees of which is local budgets. Local issues are financed with expenditures of local budget funds. However, municipalities have limited powers to form the expenditure and revenue of their budgets. Expenditure obligations of municipalities are derived from the composition of local issues defined by federal legislation. The Russian Tax Codecompletely establisheslocal taxes and fees, municipalities could just determine their rates within the limits specified in the Tax Code as well as determine the procedure and terms of payment, tax exemptions and special features of the taxation base. Local taxes include only two property taxes - property tax on individuals and land tax, which are not enough to finance functioning of local budgets. In this connectionBudget Code of the Russian Federation grants personal income tax to the local. In addition, municipalities are provided with significant amounts of inter-budgetary transfers, which puts them in a certain financial dependence on higher budgets. In this connection, the article concludes that the proclaimed independence of municipal formations is not fully provided by financial sources.