USE OF FORMALIZED METHODS IN BUDGET PLANNING

Abstract

The article explores the theoretical and methodological foundations as well as practical approaches to the application of formalized methods in the process of budget planning in Ukraine. The relevance of the study is determined by the growing need to enhance the scientific validity and efficiency of fiscal decision-making in conditions of uncertainty, economic instability, and wartime challenges. The paper emphasizes the transition from traditional, intuitive, and statistical approaches to scientifically grounded formalized methods that allow to quantify the impact of economic factors and to improve the precision of medium-term budget projections. The study applies a system approach, comparative analysis, and econometric modeling methods. Statistical and mathematical modeling techniques, including regression analysis, trend extrapolation, and time series models (such as ARIMA), are used to evaluate and forecast key revenue sources of the state budget–personal income tax (PIT), corporate profit tax, value-added tax (VAT), and excise duties. The modeling of PIT revenues considers indicators such as average wages, employment level, and tax rate, while VAT forecasting is based on GDP dynamics, consumer price index, import volumes, and exchange rate trends. The results of the study demonstrate that the use of formalized forecasting methods significantly increases the reliability of budget planning by providing a quantitative basis for estimating the effects of macroeconomic factors and fiscal policy changes. The practical application of regression and time series models allows for the formulation of alternative budgetary scenarios (optimistic, baseline, and pessimistic) and contributes to the optimization of public resource allocation. The practical value of the article lies in the possibility of implementing its methodological approaches in the work of financial authorities at both the national and regional levels. The proposed models can be used for medium-term fiscal planning, improving the transparency, predictability, and efficiency of the budget process.