Fiscal Decentralization and Local Tax Policy: An Empirical Analysis of Community Self-Sufficiency in Ukraine

This study evaluates the impact of local taxation on the financial self-sufficiency of territorial communities in Ukraine within the context of ongoing fiscal decentralisation. As transitional economies seek to empower local governance, the ability to generate autonomous revenue becomes a prerequisite for sustainable regional development. Utilizing a structural-empirical analysis of budget data, the research identifies the specific tax instruments, primarily property and land taxes, that most effectively drive community autonomy. The findings demonstrate a significant correlation between tax base diversification and the reduction of vertical fiscal imbalances. The study highlights the challenges posed by martial law and economic volatility, proposing a model for strengthening local fiscal resilience through digital administrative reforms and optimised tax incentive structures. The research concludes with policy recommendations for harmonising Ukrainian local tax frameworks with European standards to ensure long-term financial stability at the municipal level.Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.Article’s History: Received 5th of January, 2025; Revised 9th of February, 2026; Accepted 2nd of March, 2026; Available online: 30th of March, 2026. Published as article in the Volume XXI, Spring, 2(92), March, 2026.