THE MAIN PROBLEMS OF FINANCIAL INDEPENDENCE OF LOCAL SELF-GOVERNMENT BODIES AND THE WAYS OF THEIR SOLUTION IN RA

In our study, we investigated the problems of financial independence in the Republic of Armenia (RA) and the options for their solution. In the scope of our research, we make an reference to one of the primary objectives behind the expansion of communities: to bolster the autonomy of local governments and achieve financial self-sufficiency. We propose an alternative solution, advocating for the collection of taxes at the local level. Our research reveals that approximately 55% of revenues in enlarged communities of RA stem from official grants. Despite the stated aim of community expansion to foster financial independence, the reliance on official grants in budget formation continues to escalate, forming the predominant source of revenue. Conversely, revenues generated from local taxes, primarily land tax and property tax, contribute only 21% to the total revenue pool. In various scholarly works, the governance model of the RA has been likened to the German model, while also exhibiting similarities to the council- mayor model prevalent in Anglo-Saxon systems. Under these models, local communities predominantly generate their own incomes, thus securing their autonomy and diminishing reliance on state funding. Our research delves into the budgetary frameworks of select countries following the German governance model, comparing them with the revenue sources of RA. In this context, we propose innovative approaches to bolster municip