At the session of the Vitebsk Regional Council of Deputies, preliminary results of the outgoing year were summarized and the budget for 2022 was approved.

This year, the execution of the region's main financial document took place amidst a large number of unknowns due to the inability to predict the impact of the coronavirus epidemic on the economy. All participants in the budget process had to demonstrate maximum professionalism to effectively use state funds and maintain the social orientation of the regional budget. In an interview with "Vitebskiye Vesti," the Deputy Head of the Main Financial Department of the Regional Executive Committee, Inna Yushchenko, spoke about the peculiarities of the outgoing and the innovations of the future financial year.

— Inna Vladimirovna, what are the preliminary results of the regional budget execution in 2021?

— There are all the prerequisites for fulfilling the budget of the Vitebsk region for 2021 in compliance with the established parameters. When the republican budget is adjusted at the end of the current year, we expect to receive certain financial support, which will help complete the balancing of revenues and expenditures, taking into account the actual development needs of the region.

The budget is always closely linked to the processes occurring both in the region and the country, as well as in the world. Moreover, life constantly presents new challenges, sometimes very unusual ones. Their solution is not easy. Despite certain difficulties, in 2021, it was possible to provide additional support to the region's healthcare, the agro-industrial complex, and local road management. Additional tax revenues, reserve funds of local budgets, and funds from the republican treasury were directed towards these goals.

Above-plan revenues from personal income tax, profit tax, VAT, and payments from small and medium-sized businesses became significant aids in the execution of the current year's budget.

Over the year, own revenues will increase by 130 million rubles against the plan; they are fully integrated into the budget process. Payment for the lease of communal property, as well as a number of other non-tax revenues, remain growth reserves.

The controllability and, consequently, the completeness of the receipt of such payments have increased over the past two years as a result of assigning management bodies – revenue administrators – to them.

— What is the situation with budget expenditures?

— The budget is always focused on balance, on aligning expenditures with the volume of revenues that can be expected. The fulfillment of the state's basic social obligations remains a constant priority. To this end, the budget's economic expenditure structure fixes and cannot be changed the volume of resources for labor remuneration in the budget sector, social payments to the population, the purchase of medicines and medical devices, the payment of utility services by budget organizations, subsidies to transport organizations, housing and communal services, and enterprises providing the population with solid fuels, and others.

The overall structure of the regional budget remains unchanged and implies the priority financing of the social sphere. Despite external challenges and internal problems, a significant part of the budget (almost 70%) is directed towards expenditures in the fields of healthcare, education, culture, physical culture, and social policy. In addition, a certain amount of state support (up to 13% of the budget) has been provided to sectors of the national economy – agriculture, transport, and road management.

Vitebsk region is constantly developing. A number of investment projects are implemented annually in the region – reconstruction and construction of hospitals, schools and kindergartens, infrastructure facilities. At the same time, it is not possible to significantly increase the volume of capital investments, as we rely more on the financial resources of the local budget for their development. If borrowed funds are provided for these purposes, they are in most cases on a repayable and paid basis. The real way to increase investments is to enhance the financial capabilities of the region's organizations and build up the budget's own potential.

— One of the pressing issues is the provision of housing for citizens. What does the budget offer to support citizens in this matter?

— Those in need of housing can count on assistance in several areas. Subsidies are provided for repaying the principal and reducing interest on bank loans obtained for the construction or reconstruction of residential premises on commercial terms. Financial assistance in repaying commercial loans is provided to young and large families. Payments from the budget for nominal privatisation vouchers "Housing" will continue. In 2021, the volume of support for housing provision increased by 50%, and in 2022, it will increase by another 40% to reach 56.5 million rubles.

For socially vulnerable population categories, non-cash housing subsidies are provided from the budget to partially cover the cost of housing and communal services.

— What are the directions for increasing the efficiency of budget expenditures? What helps to save state resources?

— For the budget, the principle of efficient use of funds means achieving set goals with a minimum volume of resources, while guaranteeing the preservation of the quality of budget services. Such approaches are applied both during budget formulation and execution.

The main tool in this aspect is the programme- mục tiêu (programme- mục tiêu) method of budget planning, where expenditures are maximally distributed among the measures of state programmes. The obvious advantages of this approach are that budget resources are tied to specific state functions, are transparent, and are highly controllable.

Already today, 93% of the expenditures of the local budgets of the Vitebsk region are financed within the framework of state programmes.

The efficiency of budget expenditures is also enhanced by the implemented standardisation of the cost of budget services per consumer and the gradual phasing out of itemised staffing and property maintenance of budget organisations.

Efficient resource allocation helps to solve the tasks of their economical spending. Here, the professionalism and responsibility of the recipients of budget funds come to the fore, and compliance with public procurement procedures is of great importance.

Effective off-budget activities contribute to reducing the burden on the budget. In the pre-pandemic year of 2019, income-generating activities replaced 6.5% of the expenditures of budget organisations. This year, it has been possible to restore the total volume of "off-budget" activities in the social sphere in absolute terms, but its share in budget expenditures has only been achieved in education so far.

Off-budget activities should be adapted to modern conditions, and the range of paid services can be updated and expanded considering new opportunities. Only in this way can this source of resources become the basis for strengthening the material and technical base of social sphere institutions.

— Have you managed to reduce the budget's accounts payable?

— The amount of the region's budget accounts payable is not critical for budget stability and amounts to 33.5 million rubles. Despite the increase in expenses, its volume has been reduced by 4 million rubles compared to the beginning of the year, including a nearly twofold decrease in the consolidated budget's overdue payables.

I would like to note that payables for medicines and medical supplies have been reduced by 39%, for food products – by 28%, and for utility payments – by 1.5 times.

— In your assessment, what are the main features of the Vitebsk region's consolidated budget for 2022?

— The main goals of the budget policy for 2022 are to maintain social stability and the achieved level of social protection for the population. No cardinal structural changes in budget expenditures are planned.

The state policy aimed at increasing the wages of employees in the budget sector will continue to be implemented. Factors for wage growth will include an average increase in the base rate by 7% and the amount of the health improvement allowance, as well as the establishment of additional industry-specific incentive bonuses for certain categories of employees. If necessary, an additional opportunity to use the reserve fund of the head of state for these purposes is envisaged.

Budget revenues are projected at 3 billion rubles, of which 62% are own revenues. To form a strong revenue base, they should increase by at least 7% compared to the 2021 level.

The draft law on the republican budget for 2022 includes an important innovation: local self-government bodies are granted the right to make decisions on increasing the standard profit tax rate (currently 18%) within two percentage points. If such decisions are made, additional funds will be directed towards the construction of engineering and transport infrastructure, and the construction, reconstruction, and repair of local roads.

The consolidated regional budget for 2022 was formed with revenues exceeding expenditures by 100 million rubles. This allows for the fulfillment of the obligations of the region's local government bodies regarding the repayment of borrowed funds, including the return of budget loans to the national budget, the redemption of bonds, and the fulfillment of guarantees for bank loans.

The budget balancing was carried out taking into account the unconditional fulfillment of tax obligations by taxpayers, the timely and full return of borrowed budget funds by organizations, and the restoration of guarantees fulfilled at the expense of the budget.

An important factor for the socio-economic well-being of the Vitebsk region is the achievement of economic growth by enterprises and organizations. The additional revenues generated for the budget from this will be directed towards the further development of the region and the improvement of people's quality of life.

Taking this opportunity, I would like to express my sincere gratitude to my fellow financiers in the region for our joint fruitful work, to extend warm words of appreciation to the veterans of the financial system, and to congratulate everyone on the upcoming professional holiday – Banking and Financial Worker's Day, which will be celebrated on January 2.

Source: vitebsk-region.gov.by