Experts discuss development of intergovernmental fiscal relations

30 august 2018

The Analytical Center has hosted a roundtable titled "Intergovernmental Fiscal Relations: Ways of Development" that included expert discussions about the effectiveness of various ways the federal government can offer financial support to the regions, the structure of money transfers between different levels of government and the principles of their distribution. Regional representatives also talked about their experience in obtaining funding from the federal government for the implementation of specific projects.

Anton Steshenko, Head of the Department for Strategic Development, Public Administration and Regional Policy of the Analytical Center, talked about the possible ways for reforming intergovernmental fiscal relations in the Russian Federation. "We need to give local and regional governments more autonomy in terms of tax collection, for example, we could cancel the federal tax exemptions for regional and local taxes that go directly to regional and municipal governments," the expert believes. "It is also important to create a transparent system for transferring funds between different governments and boost the effectiveness of government spending at all levels."

Mr Steshenko believes that special attention should be devoted to the development by the state development institutions (JSC Corporation MSP, Russian Export Center, Industrial Development Fund, Vnesheconomobank) of targeted proposals for promoting entrepreneurial activity for each specific constituent entity of the Russian Federation. "Equally important is that we revise the mechanism for financing social organizations by means of ensuring equal and non-discriminatory access to funding for both state and non-governmental organizations in order to promote social entrepreneurship and attract private investments to social markets as well as reduce the spending of regional and municipal governments in the process," the expert said.

Svetlana Enilina, Deputy Chair of the Cabinet of Ministers of the Chuvash Republic and the Minister of Finance in the Chuvash Republic, suggested revising the terms for restructuring federal government loans given to regional governments in 2015-2017 as well as reclassifying some of the (excessive) standard and regulatory requirements and construction regulations as recommendations or giving the local governments the authority to approve them locally, taking into account the specific features of every region or municipality.

Among the other federal support measures the roundtable participants noted the increasing role of public participation in the budget planning process, reducing the debt burden and the rising payments to service the regional debt as well as the increasing administrative liability of governors and heads of financial authorities.