BUDGET DECENTRALIZATION AND TAX RECEIPTS DISTRIBUTION IN EUROPEAN COUNTRIES: A COMPARATIVE ANALYSIS

Abstract

The paper presents a comparative analysis of fiscal decentralization and the distribution of tax receipts in selected European Union and OECD member states, namely France, Poland, and Sweden. The study aims to identify the features of tax receipts formation at different levels of government and to assess the role of intergovernmental fiscal relations in ensuring the financial capacity of local governments. The research is based on comparative analysis, synthesis, tabular methods, and statistical evaluation. The study examines the theoretical foundations of fiscal decentralization as an institutional mechanism for allocating financial resources between central and local governments. The economic development levels of the selected countries and Ukraine are analyzed as a prerequisite for the functioning of their budget systems. In addition, the paper compares the degree of GDP centralization through general government revenues. The findings indicate significant cross-country differences both in the scale of national economies and in approaches to the redistribution of public financial resources. The paper analyzes key indicators of fiscal decentralization, including the share of local government revenues and expenditures within general government finances, the dependence of local budgets on intergovernmental transfers, local debt dynamics, and the structure of local revenue sources. The results show that Sweden demonstrates the highest degree of fiscal decentralization and local tax autonomy, Poland combines considerable expenditure decentralization with substantial reliance on transfers, while France represents a model of moderate decentralization with declining transfer dependence. The study also examines the structure of tax receipts at both central and local government levels and identifies differences in the allocation of major tax categories across budgets. In France, local budgets are primarily financed through taxes on production and imports, whereas in Poland and Sweden income taxes constitute the main source of local tax receipts. The paper concludes that the structure of tax receipts and the system of intergovernmental fiscal relations are key determinants of local governments’ financial capacity and may serve as an important reference for improving fiscal policy in Ukraine.