Issues of State Budget Improvement

Data Parulava, Agribusiness Teaching Center Georgia State Agriculture University

Georgia` economy is on the most responsible step of transition on market relationship, importance of which is proved by the world practice. Nowadays, Georgia is on one of the most important stage of its long history.

Transmitting on market administration methods and role of taxpaying –budgetary system generation while market economy condition, made budgetary system improvement and reforming top issues.
State budget of Georgia keeps its important role while transitional period on market economy, moreover, its methods of influencing on social production and social relationship sphere under the changing. It presents to be one of the basic means of created national income and gross products` separation.
State Budget performance is largely depended on forming proper taxation policy. First of all, it should be based on scientific initials that we unfortunately do not see in Georgia. The second is that, taxpaying policy should equally include interest of State, industries and of each member of a society.
Budgetary system is the unity of the central authority of Georgia, authority of the autonomous republics, financial resources mobilization and regulatory legislative with sub- law acts aiming authority duties fulfilling, finance- budgetary policy, budgetary process and correspondence budgets. Perfection of budget includes: The first, increasing obligatory of tax incomes effectiveness, its responsibility growth in budget incomes volume increasing, and the second, process of reforms with the unity of legislative acts and finance policy supplement and obligatory of the process hastening, with determination of other countries` experience in every point of budgetary system fiscal structures.
Local authorities should continue their work in the direction of improving budgeting process, especially mobilization of local taxes,
and budgetary money purpose and effective expanse, effective and purposeful expenditure of budget funds.
Methods of expenses management, defining local government liabilities and Tax and non-tax incomes require further optimization,
Budgetary arrangamnet of local self- governance, effective and valuable management of budgetary process, requires widening of the units.
Material and technical equipment support (computerization) of local government Economic and finance services should continue, trainings for the staff of the above services should be delivered in order to rise their quality.
Transforming on economic methods of administration and budgetary system role increasing within market economy, made obligatory of budgetary system creating into a main topic. Unfortunately, gist of budgetary system is not explained till the end, because budgetary, fundamental, theory bases are not completely formed.
Perfection of budgetary system is important problem for today` s Georgia. Effective reforms should be conduced to solve problems in this sphere.
Budgetary system of Georgia should be built on the experience of Trans –Caucasia, Middle East, Ukraine, Turkey and East Europe, defining characteristics of our country.
Exactly such sort of methods of approach will give possibility of competitive capacity environment improving, serious reforms of regional administration realizing, extra bureaucracy groups to be canceled and existed structural authorities to be improved. Forming of the state budget and each local budget, allot of tax incomes to be realized according to law determined rights of each participant, what is unable to be realized for the present moment.
Main condition for Georgia ` s state budget perfection should become the creation of income data, purposeful usage of expanses, absolute independence while planning financial resources use and in total perfection of budgetary process.
This approach will give the authority the following opportunities:
1. To implement effective management of economy by means of proper functioning of budgetary system on the bases of showing and operating internal resources;
2. To increase the responsibility of all groups of budgetary system while getting possible negative results in determining the level of risk factors;
3. To reduce the number of hidden taxes by individuals and legal entities and also to reduce the demand for decreasing tax rates. To assist Investment process and promote industry;
4. To create conditions for hastening shadow economy legalization, to double efforts in fighting against corruption.
Budgetary crisis existing in Georgia today presents to be one of the basic problems, and exact volume of budget determination as in absolute amounts, as well as in GDP, for making it optimally response state social –economic and political functions` realization. Creation of such sort of budget is unavailable for yet, because it is based on non –scientific regulations, but on existed reality of different developed countries ` experience, without any definition of county` s economy peculiarities and national state interests.
Mobilization of state incomes and managing the expanses, taxation, is the most week point in economy reforms provided in our country, because while tax system current perfection process, progressive tax and social aid systems could not be created.
Social and economic policy directions of the authority in practical aspect should be basically faced in budgetary politics. Budgetary policy present to be main gear with the support of which the authority practically enters business aerial of each citizen and by the budgetary expanses, participates in legal incomes forming process of the citizens. So, population may not be indifferent realized events concerning budgetary policy issues. Budgetary problems are rather active in Georgia, then in the countries having developed market economy, because we have not financial and social stability middle level of population yet, besides, number of low profitable population is too big.
Reference should be made that created real economic condition in Georgia faces, that while right budget resources condition, balanced budget forming should take place. The authority should maintain low profitable social levels real social guarantees. Meanwhile, for the economy non – state sector supplement, economy development stimulation for budget should become available.
One of the basic direction of Georgia ` s budget system improvement is its stimulation influence reinforcement on economy. Besides, It should supply development of valuable subjects and whole market infrastructure, creation of exact environment (as a gear of economy resolutions realization). Following all these, tax – budgetary system should be turned back to economy, stimulate its generation and that way wide taxation incomes base.
Forming and realization of economy development basic priorities should be provided by budgetary politics. Their forming is authority` s one of the leading function. U.S. Japan, Germany and other countries ` experience shows, that budgetary system regulation presidents to be most effective leverage of social –economy development, investition strategy, foreign – economy and priority fields.
Basic task of today` s Georgia is creaking down on two non eligible for budget events –deficit and shadow economy.
Structure of Georgia ` s budget classification despite of changes on separate directions, is not able responding functions of transmitting economy requirements. It is less of budget and national economy relationship facing exact information, so this process is almost far from real economic capacity of the country. Unfortunately, forming of the budget in our country is not on the beginning level. The cause is budget supplement capacities are used just with 25 -30 %, i.e. twice more capacity of budget supplement actually “disappeared” and fill the pockets of “ untie –budgetsists”, from the other hand, volume of expanses basing on interior reserves under limiting resources condition. It` s actually oriented on next period and how it could be transform into expanse of foreign support.
Classification of the useful part of budget, structure of expanses includes three directions at the same time: instance, goal and subject classification, but not including imperfections of source classification.
Condition of state expenses actual separation is actually ignored, because in the estimation of the same source are faced different expanses. It should be noted, that classification of expanses by goal appointment, which should give complete picture of expanses use (as the practice shows). Moreover, by different articles, separation of expanses does not come in correspondence with sorts of expanses, exactly that is the cause of important amount of money directing to the economy functions realization by the authority, but social function of money turns out almost forgotten ( I mean directing of the expanses to the social – economy condition improvement). Social function of expanses realization actually left behind, because of supplement with financial resources. Improvement of the condition in time is necessary for mass social blast avoiding.
According to recent years budget analyze, increasing of unjustied expenses volume sharply reduced opportunities of budgetary sources using for national economy priority fields structural problems resolving.
While transitive economy condition changes should be provided concerning financial sources expanse. In the case of not controlling the issue limited resource and correspondence corruption environment is creating for official, Budget sources should supply the most important state tasks realization.
Budget specialization should be based on fields of vital importance for the country and not old, traditional remains, also temporary successful financial achievements.
Budgetary assigns should provide financing of priority state programs, related to the county` s economy, fields of vital importance development. Budget specialization should be based on this and not fields structural re- checking. Sensible classification of the expanses is not giving real picture of state expenses separation, because the same expenses have different goals.
Budget deficit reduction should be provided on the background of exact program, treatment and not budget`s artificial balancing.
Today`s government should obligatory determine unpleasant experience of the recent government and fulfill its duties will responsibility. Responsibility should stay higher then grants attracting issue.
It`s very hard and almost impossible, but they should try their bets for reaching the condition when Georgia will give out grants, instead of receiving them.
Transition on economic administration models shifted necessary amendments in budgetary system forward. Accordingly, in order to modernize taxation structures it is necessary to create the taxation system that will consider peculiarities of country’s economy and the system chosen by the people.