In the Russian Federation, inter-budgetary relations are activities based on the interconnection of the state authorities of the country, subjects, local self-government, and related to the execution and formation of the corresponding budgets. All income-generating schemes included in the general system of the state are interconnected. This relationship is determined by intergovernmental relations.
There are certain principles on which this interaction is based.
Inter-budgetary relations are based on the distribution and consolidation of the expenditure side of budgets at specific levels of the system.
It also uses the distinction (approval on an ongoing basis and distribution in accordance with the time frame) of the regulatory revenue side.
An integral condition on which intergovernmental relations are based is the equality of budget rights of subjects (municipalities).
In terms of interaction, equalization of the level of expenditure-income minimum security of subjects (territorial units) is applied.
Inter-budgetary relations reflect the equality of all state budgets when interacting with the federal one. In addition, the equality of local income-generating schemes is ensured in conjunction with the schemes of the subjects.
Based on these principles, certain types of spending systems can be transferred from federal financial plans to entities, and from entities to territorial entities. Thus, forms of intergovernmental relations are formed.
The principle of equality of expenditure and income schemes involves the use of one method of calculating the norms of financial costs for the provision of municipal and state services, a single procedure for the payment of regional and federal taxes.
The distribution of tax revenues (according to Article 48 of the Budget Code of the Russian Federation) suggests that the amount of the said fees of the entities should be at least fifty percent of the total income in the consolidated budget.
To ensure the expenditure of territorial financial schemes, it is necessary to have the appropriate income.
The inflow of territorial finances can be regulatory and own.
Own revenues are established on an ongoing basis, partially or fully, for the respective budgets. The fixing of this provision is carried out by the legislation of the Russian Federation. Own incomes include tax fees determined by the regulations, gratuitous transfers, etc. This category makes up a smaller part of the total inflow of territorial finances.
Regulatory revenues are transferred to local and regional governments. Thus, financial support is formed for the performance of the functions of these bodies. Regulatory revenues are directed towards the social and economic development of territories.
This category includes regional and federal taxes, as well as other payments, according to which the percentage ratios of revenues to the budgets of entities and municipalities for the coming fiscal year are approved . Norms are also set for a long period (of three years) for various types of such income.
The category of regulatory financial profit is made up of transfers (funds received from funds, regional and federal, support of regions). Their size is calculated according to the formula and methodology established by the government.
In addition, subsidies, subventions and subsidies are used as regulatory income. According to experts, these types of financial receipts lack stimulating qualities. The practice of transferring such funds slows down and does not contribute to the formation of the economic initiative of territorial administrations, lowering their influence on the economic development of the region, and reduces financial control.