American Journal Of Social Sciences And Humanity Research
35
https://theusajournals.com/index.php/ajsshr
VOLUME
Vol.05 Issue01 2025
PAGE NO.
35-37
10.37547/ajsshr/Volume05Issue01-10
Prospects for increasing local budgets' revenues based on
the social and economic development of the region
Zikirov Samandar Usmonovich
Termez State University, postgraduate student, Uzbekistan
Received:
26 October 2024;
Accepted:
28 December 2024;
Published:
23 January 2025
Abstract:
This article explores the potential benefits and opportunities associated with increasing local budget
revenues by focusing on the socioeconomic development of a particular region. The aim is to highlight the positive
impact of socio-economic initiatives on the financial well-being of local governments.
Keywords:
Local budget, financing, taxes and taxation, income and expenses, grant, subsidy.
Introduction:
Local budget revenues are directly
related to the tasks assigned to local governments,
their ability to collect local taxes and revenues, the
ability of higher government bodies to provide financial
assistance to regions, the level of economic
development of regions, and the financial and
budgetary situation. policy pursued by the state.
We know that state taxes will be distributed between
the relevant local budgets in the next budget year in the
manner legally established by the Oliy Majlis of the
Republic of Uzbekistan. Deductions from state taxes
are determined as a percentage of the amount of these
taxes collected in the regions. However, these
percentages are determined for the approved year
each year during the preparation and approval of
budget projects. Local budget revenues consist mainly
of established revenues, fees, and state tax deductions.
When regulating local budgets, the state widely uses
deductions from state taxes as a percentage as
regulating revenues, as well as funds given to a higher
budget through subsidies. During the transition of
Uzbekistan to a market economy, the deepening of
privatization and the development of democratic
processes will lead to an increase in the weight of local
budgets in the state budget. Therefore, it is necessary
to improve the distribution of state taxes between
budgets of different levels. In this case, it would be
appropriate to pay attention to the fact that the role of
deductions from state taxes is not only to ensure the
income of local budgets, but also to the interest of local
governments in attracting funds to higher budgets and
increasing the efficiency of social production in the
regions. Indirect taxes include excise from the
distributed income of local budgets. All other taxes are
included in the category of own taxes. Local budgets of
the Republic of Uzbekistan occupy an important place
in direct taxes.
Direct taxes occupy an important place in the local
budgets of Western European countries, their share in
the distributed income is 70-75%, indirect taxes - 3-4%,
other taxes and income - 20-25%. In Japan, direct taxes
make up 85%, and indirect taxes - 15%. As we can see,
the weight of indirect taxes from the income of local
budgets in different countries is different. Excise tax is
a net income of the state and is levied to the state
budget upon the sale of excisable goods. Excise tax is
applied to valuable goods and products, and the main
task of excise tax is to ensure the revenue side of the
state budget. The main purpose of transferring excise
taxes to local budgets is to strengthen the revenue base
of local budgets. Fixed taxes received by local budgets
are divided into taxes on profit, income and resources.
The ratio of local budgets to fixed income of different
types of direct taxes varies in different countries. In
Scandinavian countries, accrued profit, income from
income tax make up 80-90% of the total amount of
accrued taxes. In Belgium, Germany and Austria, the
same figure is more than 50 percent. In Ireland,
property taxes are the only fixed taxes. In the
Netherlands, property taxes make up 2/3 of all taxes. In
American Journal Of Social Sciences And Humanity Research
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American Journal Of Social Sciences And Humanity Research (ISSN: 2771-2141)
Japan, 48% of tax revenues transferred to local budgets
come from housing tax, and 21% from property tax. An
analysis of revenues sent to local budgets of the
Republic of Uzbekistan shows that their share is
increasing based on the approved budget. The goal of
the state is to increase the revenues of local budgets of
local governments.
Exceeding the forecast of revenues of the republican
budget of the Republic of Uzbekistan, the republican
budget of the Republic of Karakalpakstan, regional
budgets of regions, the city budget of the city of
Tashkent, budgets of districts and cities is defined as
the amount exceeding a certain forecast of revenues
for payments in the manner prescribed by law. It is also
not allowed to centralize part of the revenues of lower
budgets that exceed the forecast of a higher budget.
One of the priorities of the reforms implemented in our
country to increase the independence of local budgets
is to ensure the active participation of citizens in
determining the areas of spending funds from
additional revenues of the local budget of the
corresponding region. In this regard, the Resolution of
the President of the Republic of Uzbekistan Shavkat
Mirziyoyev dated August 22, 2018 No. PQ-3917 "On
measures to ensure the openness of budget
information and citizen participation in the budget
process" is of great importance. In particular, starting
in 2019, mechanisms have been introduced to ensure
citizen participation in the budget process, spending at
least 10% of additional sources of local budgets of cities
and districts, taking into account public opinion.
Starting from 2022, it is planned to allocate 5% of the
total expenditures of the city's local budget and at least
30% of the additional funds generated in the "Civil
Initiative Fund" to finance events formed on the basis
of public opinion. For public control over budget
expenditures, the "Open Budget" portal was launched,
which includes state budget projects, the main areas of
tax and budget policy, budget execution reports,
conclusions of the Accounts Chamber and additional
sources of local budgets, information is published on
events that are planned to be financed from the
account. In addition, the "Initiative Budget" project was
launched on this information portal with the aim of
allocating at least 10% of additional funds from local
budgets of cities and districts to finance the socio-
economic sphere, taking into account the opinions,
proposals and voice of the public. Based on the above,
it can be said that the rights of local governments in
planning and executing local budgets should be
expanded. In our opinion, it is advisable to further
improve the legal framework for the relationship
between the republican budget and local budgets.
Such transfer of powers to make financial decisions
from the sectoral level to the regional level is a
legitimate step in the formation of a market economy
and is expressed in the decentralization of the decision-
making process, which is natural for the business
environment.
The reforms carried out in the country show that the
process of making management decisions should be
gradually transferred from the highest level to the
regional and regional levels, and then the self-
government of non-governmental bodies of civil
society
(entrepreneurs,
producers,
consumers
expressed the logic of transferring to competent
authorities).
The logical continuation of these processes is the
increasing role of local governments and local budgets
in inter-budget relations. In these processes, it is
important to increase the volume of financial resources
and especially budgetary funds for the implementation
of local authorities' tasks. In our opinion, the
introduction of stable uniform regulations for
deductions from national taxes to local budgets over a
certain period of time is of great importance for
reforming the process of financial equalization of local
budgets, improving it and bringing it up to the level of
world standards. The fact that regional budget
expenditures are not provided with sufficient revenues
requires the redistribution of part of the revenues
collected in the budget of the primary republic into
state regulation of local budgets. For this purpose, in
the practice of all countries, grants and subsidies are
used.
In order to increase the financial sustainability of local
budgets of the Republic of Uzbekistan, it is necessary to
develop measures aimed at increasing the efficiency
and optimizing the structure of budget expenditures,
which requires the creation of certain conditions and
incentives for all participants in the budget process. The
first should include the organization of a budget
process focused on the final result, restructuring the
budget network, and improving the investment
management system.
The use of the technology of standards for deductions
from national taxes to budgets of different levels is due
to the need to form a revenue base for the budgets of
regions that do not have a sufficient revenue base to
cover the expenses of their own budgets. It should be
noted that the use of the above mechanism does not
guarantee the formation of a revenue base for local
budgets that would be sufficient to cover their priority
expenses. In order to cover the priority expenses of
local budgets when drafting budgets, financial
authorities use the following instruments of
interbudgetary relations for the missing portion of
American Journal Of Social Sciences And Humanity Research
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American Journal Of Social Sciences And Humanity Research (ISSN: 2771-2141)
revenues:
• argeted subventions for local budgets, the revenue
portion of which, even if the national and local taxes
collected in the region are fully credited to the local
budget, does not cover the expenses of these budgets;
· subsidies to local budgets to fully cover their expenses
due to the insufficiency of their own revenues.
(Subsidies are provided for individual local budgets of
cities, districts or regions, the expenses of which are
not covered even if the national and local taxes
collected in the territory of such regions are fully
credited to their
• budgets, as well as the allocation of targeted
subventions to cover a certain type of expenses);
· "transferred revenues" - a portion of the revenues of
one budget transferred in a planned manner to another
budget.
Thus, increasing the income of local authorities and
optimizing their expenses should undoubtedly lead to
increased sustainability of local budgets, which is of no
small importance for the further development of the
Republic of Uzbekistan.
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