“Five years ago, in 2020, decentralization reform was completed in Ukraine. The newly created communities have received wide powers and, importantly, the opportunity to dispose of their own lands. It was a significant step forward.”, – WRITE: www.pravda.com.ua
In 2020, communities turned from administrative units into unique ecosystems, each of which has its own investment potential. In addition to land, it is water, agricultural potential, logistics, human capital and more. Communities, unlike officials in the capital, are more interested in attracting investors. Therefore, they usually solve all the issues quickly, are ready to show flexibility and make concessions. It is on the ground that it is possible to agree faster, for example, the conditions of the memorandum, to approve the project, to resolve organizational and personnel issues. If for Kiev opening a plant in a small village 500 kilometers from the capital may seem an ordinary event, then for the local community it is not true. Because these are new jobs, taxes and the ability to improve the lives of all residents. For the sake of a new enterprise, the local authorities are ready, for example, to lay the road or communication networks, to approve a detailed plan of territories or to allocate a land plot. And the investor does not need to bypass the offices of regional authorities or a profile ministry for months.
Risks to communities The full -scale Russian invasion struck the financial capabilities of the communities. Most of them have declined tax revenues – since February 24, 2022, some of the enterprises stopped their work or even registered west. And now no one is able to predict when factories and factories restore their work. Agrarians in the first years after the Russian invasion were faced with the problem of selling grain-the usual logistics pathways were destroyed, and the grain corridor began to work fully, without significant interruptions and influence of Russia, only in the fall of 2023. And these problems influenced the revenue parts of the budget of those communities where agricultural enterprises are located and operating.
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In April 2023, owners and users of land were allowed not to pay rent or land tax in the territories where hostilities continued or continued. Ecological tax or land tax was lost.
The financial capacity was also influenced by changes to the Budget Code, approved in November 2023. They consist in the fact that from October 1, PIT from the income of servicemen, police, persons of rank and file staff should be paid not to the local but to the special fund of the state budget. This is an important solution because the country needs funds for war and protection of its independence. But for those communities in the territory of which military units or SES are located, it has become a serious challenge.
It is possible to compensate for the losses, but this requires new investments. What is not very comforting news for local communities. Because the volume of direct foreign investment – which is an indicator of business development – is still and close to pre -war indicators. For example, in 2021 it amounted to $ 6.7 billion, 2022-$ 1.2 billion, 2023-$ 4.2 billion, and in 2024-UAH 3.3 billion. In the first quarter of 2025, Ukraine was able to raise only $ 669 million. The situation is not improving.
Competition among communities for each investor is crazy. And given the current situation, local authorities do not have many tools to attract investors. Communities can dispose of land, set local taxes, coordinate projects – but without financial and institutional resources, it does not produce the desired result. The absence of qualified economic structures, investment passports and marketing strategies still makes communities vulnerable and dependent on external decisions.
What can be done The authorities can support the communities now without waiting for the war. To do this, it is necessary to legislate the mechanisms of community participation in strategic infrastructure projects (land, taxes, compensations, etc.). Communities should receive the right to grant tax benefits, exempt from rent for the period of construction, to participate in compensatory mechanisms. It is necessary to abolish restrictions on the creation of free economic zones, in the regulation of income tax and in participation in large projects – it is inhibiting development.
You can also develop a special state program to attract investment for community development – with benefits and preferences for business that is ready to work in small cities. One solution is to create a subsidiary program with preferences for such business. The program should take into account the specifics of each community, not impose universal solutions designed without consultation with the local authorities. And this is no longer a luxury, but a need. In a few years, it will be possible to see the first results – the opening of new enterprises will contribute to the development of community infrastructure and improving the quality of life of its inhabitants.
Economic restoration of Ukraine is impossible without strong communities that now need support. The budgets of development are currently miserable against real needs. For example, in the city of Kiliya it amounts to only 9 million UAH per 34 thousand inhabitants annually – it is less than the cost of asphalt. Communities are forced to patch the infrastructure destroyed for decades, without support and without strategic partnership with the state. If you support local authorities now, giving them more powers, in a few years the state will receive developed cities and villages. And they will be the basis for post -war development and restoration of the country.
We do not ask for gaps – we ask for tools. Give the communities the powers, and they will create a restoration economy!
Vyacheslav ChernyavskyKiliysk Mayor of Izmail district of Odessa region
A column is a material that reflects the author’s point of view. The text of the column does not claim the objectivity and comprehensive coverage of the topic that rises in it. The editorial board of “Ukrainian Truth” is not responsible for the accuracy and interpretation of the information provided and plays only the role of the carrier. The point of view of the UP editorial board may not coincide with the point of view of the author of the column.