STRUCTURAL REFORM OF UKRAINE’S STATE BUDGET IN THE CONTEXT OF A WAR ECONOMY AND POST-WAR TRANSFORMATION

Abstract

The article examines the theoretical and applied aspects of the structural transformation of the State Budget of Ukraine under the conditions of a war economy and substantiates the directions of its adaptation to the challenges of postwar development. It is determined that the prolonged armed aggression against Ukraine and its full-scale phase that began in 2022 have led to profound transformational changes in the budgetary system, manifested in shifts in the proportions between revenue and expenditure components, a revision of funding priorities, and an increased role of mobilization mechanisms in fiscal policy. The dynamics of macroeconomic indicators and budgetary parameters for the period 2020-2025 are analyzed, which makes it possible to identify trends in the growing share of budget resources in gross domestic product, changes in the revenue structure, including a decline in the role of tax revenues and an increase in the importance of non-tax sources and international financial assistance. It is established that during the wartime period there has been a significant increase in defense expenditures, which has led to a reduction in funding for the social sector, education, healthcare, and economic activities, as well as a reallocation of budgetary priorities. The peculiarities of the transformation of the tax base are investigated, characterized by a decrease in the share of key taxes and insufficient efficiency of certain fiscal instruments. It is substantiated that under conditions of wartime instability, the importance of domestic sources of financing is increasing, particularly the small and medium-sized enterprise sector, which provides a substantial share of budget revenues and plays a stabilizing role in the economy. The necessity of forming an adaptive model of fiscal policy is proven, aimed at balancing revenues and expenditures, improving the efficiency of the use of financial resources, reducing dependence on external financing, and creating conditions for restoring the country’s economic potential. Key directions for the transformation of fiscal policy are proposed, including support for the business sector, optimization of expenditure structure, and ensuring financial stability in the medium and long term.