The role and importance of finance in the economy. The role of finance in the economy of the state The role of finance in the economic system of the state

The market economy and social sphere cannot function without financial resources. Finance serves the process of expanded reproduction of the gross social product, providing the necessary funds to all its stages (production, exchange, distribution, consumption) and each of its participants (public authorities, organizations, households).

Therefore, the role of finance in the social economic system manifests itself in two ways:

Firstly, as a result of the practical use of modern money - primary financial resources (instruments);

Secondly, as a result of the practical use of the functionality of the finance category.

The role of finance in the economic system as a result of the practical use of modern money, which has taken a modified form of primary financial resources (instruments), is realized primarily through their functions.

As a function of the scale of prices, money plays the role of a universal financial equivalent of the value of all qualitatively diverse commodity forms. At the same time, paper (metal) banknotes themselves and their modern representatives do not have value, but are its nominal carriers as financial representatives (substitutes) of full-fledged money (gold). Therefore, modern money, as a function of the price scale, plays the role of a calculation-evaluation and accounting-financial instrument for bringing exchange proportions of commodity masses of varying quality to a single denominator, and for comparing costs and results. The practical implementation of this function of money is carried out through prices for goods, works and services, as well as the assessment of debt obligations and transactions with future payments.

The pricing system provides the very possibility of commodity exchange through purchase and sale, serves the entire commodity turnover and the derivatives market within the country and in international relations. Free pricing is the first and most important condition for the functioning of a commodity market economy. Prices are the main financial regulator of the market, supply and demand of goods, their production and consumption. Objective (under the influence of market laws) or conscious (on the part of the state and monopolies) price changes entail an adequate change in the demand and supply of goods, the volume of their production and consumption. The regulatory properties of prices, including price elasticity of supply and demand, are widely used in government and corporate financial policy.

Money as a function of the price scale is inseparable from money as a financial means of circulation and a financial means of payment. Commodity circulation occurs through purchase and sale for money at certain spontaneously or deliberately established prices. Modern money, as financial representatives (substitutes) of full-fledged money, plays the role of financial means (instruments) of circulation and financial means of payment. In the role of the latter, money can be separated from commodity circulation and serve as a means of various types of non-commodity payments (for taxes, interest, fines, and other financial obligations). The circulation of primary financial resources and financial instruments derived from them for the production of cash payments is carried out in both cash and non-cash forms. It is these resources (means and instruments), when they perform the named functions, that constitute the “circulatory system” of the economy, ensuring the continuity of the process of production, exchange, distribution and consumption of GDP, the livelihoods of the population and the functioning of the country’s social sphere. In another way, when modern money performs the functions of price scale, financial means of circulation and payment, financial support is provided for the entire process of reproduction of the social product.

However, in order to fully provide financial support for the socio-economic development of the country on a safe and expanded basis, money must also perform the function of a financial store of value. In modern conditions, savings take various financial forms of accumulation. We are talking about the accumulation of capital and financial reserves, deposit savings, investments in securities and other financial market instruments by organizations, households and public authorities.

Economic stability in society, the rate of investment, economic and social growth, the financial security of organizations and the state, the welfare of the population, etc. depend on savings (accumulations).

In connection with the modification of money into primary financial resources, chronic inflation arose and is developing as a financial phenomenon of the world economy. Overflowing the channels of cash and non-cash money circulation with an excess mass of primary financial resources in excess of the required mass of means of payment for paying for goods and obligations is, at best, accompanied by their transfer into derivative financial instruments (securities, deposits, other financial obligations) involved in independent circulation in the financial market , and in the worst case leads to an increase in prices for goods and services, but usually both processes occur simultaneously.

The inflationary nature inherent in the very essence of modern money as primary financial resources (instruments) is widely used by monopolies, oligopolies and the state to extract additional profit and income. Taking advantage of a monopoly position to pursue populist policies or overwhelming influence in the market for certain goods, companies inflate prices, increasing cost inflation, or costs, understating taxable profits. This applies not only to private, but also to state-owned, including mixed, companies. The state uses inflation for its own purposes by pursuing a policy of so-called “managed creeping inflation” (2-6% annual price growth), receiving additional emission revenue to finance the budget deficit.

The state can also earn additional inflationary income from indirect taxes, the basis for the calculation of which is the sale of products at market prices. Further, these taxes are included in sales prices, causing demand-pull inflation and cost-push inflation. The inflation mechanism can have the greatest effect for the state in countries where the tax system is based primarily on indirect taxes. Here there are great opportunities to receive not only planned, but also above-plan (often uncontrollable for society) inflationary income.

For example, in the budget law for the next year, inflation (based on price increases) is planned at 4%. Value added tax (VAT), taking into account planned inflation, is planned in the amount of 104 billion cu, of which 4 billion cu. constitutes the target inflationary income. The said amount of VAT as part of total tax revenues is distributed among expenditure items in the amount planned in the budget law.

In fact, over the past year, inflation amounted to, for example, 8% (it is not a fact that government statistics will publish exactly the named, and not the planned, or slightly higher level of inflation). Then the actual revenues to the VAT budget, all other things being equal, amount to 108 billion USD, of which 8 billion USD is the total actual inflationary income, and 4 billion c.u. - above-plan inflationary income, for which budget expenditures are not planned. Depending on the established norms of budget law, excess VAT amounts either automatically reduce the budget deficit or are used to finance additional budget expenses by adopting a special law in relation to these expenses by parliament or making such a decision by the government without legislative formalization. This is the most favorable scenario for society, but other scenarios that go beyond the legal framework and relations cannot be excluded, which is possible if the level of unaccounted for actual inflation is significant (not reflected in price growth statistics).

“Creeping” inflation is an inevitability, the price of modern society for abandoning the monetary gold standard and violating the objective laws of the commodity-money economy. Households, as an independent but most economically vulnerable subject of financial relations, as well as small and medium-sized businesses, lose more of their real income from inflation. Therefore, the fight against inflation is an essential element of state financial policy.

However, it should be remembered that at different stages of development of inflation processes, the impact of inflation on the economy occurs in different ways. If the rate of depreciation of banknotes lags behind the rate of growth of the mass of money in circulation, then purchasing demand for goods increases, production, trade turnover and consumption, income in the economy, tax revenues, savings and savings grow. At this stage, the stimulating inflationary effect works, since the additional money supply is absorbed (in whole or in part) by the sphere of circulation and the financial market, satisfying the economy’s needs for means of payment. The government’s task is to prevent (or at least mitigate) the transition of inflation to the second stage, when the rate of growth of the money supply begins to lag behind the rate of depreciation of banknotes. A disincentive stage in the development of the inflation process begins: it becomes unprofitable to expand production and trade turnover, a “flight from money” begins by turning savings into material goods, the demand for purchasing and means of payment decreases, the financial market is disorganized, due to a reduction in the supply of goods, prices rise and even greater depreciation occurs. banknotes1.

The role of finance in the economic system of society is also manifested as a result of the practical use of the functionality (functions) of this category.

The financial “health” of the economy as a whole and its subjects (organizations, the state and households) directly depends on the degree to which the potential capabilities of the category of finance are realized to provide subjects with full sources of income, to obtain the proper result from expenses and control actions. Assessing the role of finance can be effective (positive) or ineffective (negative).

In general, the role of finance will be effective (positive) if in practice all the functional capabilities of the category of finance are used on the basis of ensuring the financial balance of the economy and its subjects, i.e. balance of all functions of finance: the formation of public and private economic income, the use of these incomes and the control function. Financial balance presupposes, first of all, the income-expenditure balance of the economy as a whole and its subjects, supported by control and regulatory actions and measures. An assessment of the role of finance may be ineffective (negative) if its system is unable to provide the economy and its subjects with the necessary income sources, if funds are spent ineffectively (without giving the proper return), and the management and control systems are not able to provide income and expenditure balance, necessary growth rates, profitability and efficiency of a market economy, development of the social sphere.

To assess the role of finance, various macroeconomic, sectoral and subject indicators can be used, characterizing the volumes and rates of economic and social growth, the structure of GDP, its elements and similar indicators in the context of industries and organizations, income security, efficiency of expenditures (current and capital), financial condition and solvency, etc. If the results of the assessment reveal negative aspects, then public authorities and management of organizations must make appropriate adjustments to their concepts (or individual elements) of state (municipal) and corporate financial policies.

The role of finance in its multifaceted manifestation is reflected in the System of National Accounts recommended by the UN. The gross output account (GO) characterizes the participation of finance in the production of a social product, as a result of which past value or intermediate consumption (IC) is separated from the GO in the form of material costs and intangible services and gross added (new) value (GVA). Evaluation of the latter at market prices or the difference between PV and PP gives the value of gross domestic product (GDP), the gross part of which is depreciation. Under the influence of finance, as a result of primary distribution, GDP breaks down into primary income of the economy: depreciation, gross profit, income from property and other mixed income, wages, net (without subsidies) taxes on production and imports (indirect taxes), gross savings and net exports, amounting to the amount of consumed GDP1. Finance further participates in the formation and distribution of net domestic (national) product (NPP), which is the sum of the above-mentioned primary income without depreciation (GDP - A), as well as in the formation and distribution of national income (NI) and personal income ( LD).

Chapter 2. Theory of the budget structure of the Russian Federation

Financial system is a set of various types of funds of financial resources concentrated at the disposal of the state, the non-financial sector of the economy (business entities), individual financial institutions and the population (households) to perform the functions assigned to them, as well as to meet economic and social needs.

Structure of the financial system

Depending on the methods of generating income of economic entities, the financial system is usually divided into two areas:

1) centralized finance;

2) decentralized finance.

The financial system is also divided into four subsystems:

1). Finance of economic entities (enterprises and organizations of various forms of ownership and areas of activity)

2). Household finance

3). Public finance

4). Municipal finance

The first two subsystems belong to the sphere of decentralized finance, and the second two - to the sphere of centralized (public) finance.

Finance functions

Distribution - through finance, gross domestic income is distributed and redistributed, thanks to which funds come to the disposal of the state and municipality;

Control - lies in their ability to monitor the entire progress of the distribution process, as well as the expenditure of funds received from the federal budget for their intended purpose;

Regulatory - state intervention in the reproduction process through finance (taxes, government loans, etc.). The state influences the reproductive process through the financing of individual enterprises and the implementation of tax policy;

Stabilizing - providing citizens with stable economic and social conditions.

The role of finance in the economy

The economic system of any state is based on objective economic laws. Modern states manage a market economy with the help of the state structure of the national economy, the financial tax system, and the monetary system. In a market economy, it is very important to know exactly the economic essence and the content of its categories. Money, fulfilling its functions as a means of circulation, is an intermediary between the act of purchase and the act of sale; in this function, money becomes capital.

Finance- a system of monetary relations expressing the formation and use of monetary funds in the process of their circulation.

According to its role in social production, finance includes two parts:

1) public finances,

2) finances of a business entity.

Each link performs its own tasks and is assigned a special financial apparatus, but together they form a single financial system.

In a market economy, the role of finance has increased significantly; its position in the market, competitiveness, survival and prospects depend on the financial position of an enterprise.

The role of finance in the economy is diverse, but nevertheless it can be reduced to three main areas:

1 . Financial support for the needs of expanded production.

2. Financial regulation of economic and social processes.

3. Financial incentives for the efficient use of all types of economic resources.

Financial support for the needs of expanded reproduction means covering costs using financial resources (own, borrowed, attracted).

Financial regulation of economic and social processes-the second direction of the impact of finance on economic development. Regulation of the economy is carried out through the redistribution of financial resources: it is enough to allocate financial resources and the pace of development of an industry or region accelerates, or vice versa, the cessation of financing can strangle any production.

Financial incentives for the efficient use of all economic resources carried out using various methods:

1) effective investment of financial resources;

2) creation of incentive funds (consumption funds, social sector funds, etc.);

3) the use of budgetary incentives (the provision of benefits when paying taxes is always stimulating in nature, an example would be the exemption from payment of many types of taxes on rural and farm enterprises in order to ensure their growth and development);

4) the use of financial sanctions (fines, penalties for late payment of taxes, concealment of income and property from taxation, failure to submit tax returns, etc.).

Introduction 3

1. The role of finance in regulating the development of the state’s economy 5

2. Tax policy of Russia 11

3. Fiscal policy of Russia 21

Conclusion 30

References 31

INTRODUCTION

The entire financial management system is based on the financial policy of the state. The legislative and executive branches of government participate in the development of financial policy. In modern Russia, due to the peculiarities of its constitutional system, priority in the development of financial policy belongs to the President of the Russian Federation, who, in his annual messages to the Federal Assembly, determines the main directions of financial policy for the current year and for the future. The Government of the Russian Federation must act within the framework of this message in order to implement the main directions of economic development and ensure social stability in society.

The state is the main subject of financial policy. It develops a strategy for the main directions of financial development for the future and determines tactics for the coming period.

The financial policy of the state is designed to ensure the normal functioning of the financial system of society and, on this basis, to effectively carry out its functions - economic, social, environmental, defense and others. Consequently, financial policy is part of the economic policy of the state. It specifies the main directions of development of the national economy, determines the total volume of financial resources, their sources and areas of use, and develops a mechanism for regulating and stimulating socio-economic processes. At the same time, financial policy is a relatively independent sphere of state activity, the most important means of implementing state policy in any area of public activity.

The implementation of financial policy is based on a number of general and particular (specific) principles.

General principles for ensuring effective financial policy include:

taking into account the effect of objective economic laws;
taking into account specific historical conditions;
taking into account our own experience of past years and global experience.

Private (specific) principles include the following:

balance of income and expenses in all parts of the financial system;
concentration of financial resources in the most important areas of economic and social development;
ensuring the rational construction of the financial mechanism.

The main goal of financial policy is to create financial conditions for the socio-economic development of society, improving the level and quality of life of the population.

The priorities of financial policy can be called:

reduction of social tension;
improvement of public finances;
restoration of normal functioning of the banking sector;
achieving a balance of commodity and cash flows;
increasing the financial and economic independence of regions within a single federal state;
creation of equal conditions for the regions in the budgetary and tax sphere;
eliminating financial abuse and corruption.

The purpose of this course work is to examine the financial policy of Russia at the present stage of development.

The objectives of the course work are to disclose such concepts as tax and budget policy of Russia, determine the role of finance, tax and budget systems in regulating the development of the state's economy.

1.ROLE OF FINANCE IN REGULATING DEVELOPMENT

STATE ECONOMY

Finance is one of the most important economic categories, reflecting economic relations in the process of creating and using funds. Their emergence occurred during the transition from a subsistence economy to regular commodity-money exchange, and was closely related to the development of the state and its needs for resources.

One of the main features of finance is its monetary form of expression and reflection of financial relations with real cash flows.

The real movement of funds occurs at the second and third stages of the reproduction process - in distribution and exchange.

At the second stage, the movement of value in monetary form occurs separately from the movement of goods and is characterized by its alienation (transition from the hands of some owners to the hands of others) or the targeted separation (within one owner) of each part of the value.

In the third stage, the distributed value (in monetary form) is exchanged for the commodity form. There is no alienation of value itself here.

Thus, at the second stage of reproduction there is a one-way movement of the monetary form of value, and at the third there is a two-way movement of values, one of which is in monetary form, and the other in commodity form.

Since at the third stage of the reproduction process there are constantly ongoing exchange transactions that do not require any social instrument, there is no place for finance here.

The area of origin and functioning of finance is the second stage of the reproduction process, at which the value of the social product is distributed according to its intended purpose and business entities, each of which must receive its share in the produced product. Therefore, an important feature of finance as an economic category is the distributive nature of financial relations.

Finance differs significantly from other economic categories that operate at the stage of value distribution: credit, wages and prices.

The initial sphere of emergence of financial relations is the processes of primary distribution of the value of a social product, when this value breaks down into its constituent elements, and the formation of various forms of monetary income and savings occurs. Further redistribution of value between business entities and specification of its intended use also occurs on the basis of finance.

The distribution and redistribution of value through finance is necessarily accompanied by the movement of funds, which take a specific form of financial resources. They are formed by business entities and the state through various types of cash income, deductions and receipts, and are used for expanded reproduction, material incentives for workers, and satisfaction of social and other needs of society. Financial resources act as material carriers of financial relations, which makes it possible to distinguish finance from the general set of categories involved in cost distribution. This occurs regardless of the socio-economic formation, although the forms and methods by which financial resources are generated and used have changed depending on the change in the social nature of society.

The use of financial resources is carried out mainly through monetary forms for social purposes, although a non-fund form of their use is also possible. The advantages of the stock form include: the ability to more closely link the satisfaction of any need with economic opportunities, ensuring the concentration of resources on the main directions of development of social production, the ability to more fully link public, collective and personal interests.

Based on all of the above, the following definitions can be given: finance is monetary relations arising as a result of the distribution and redistribution of the value of the gross social product and part of the national wealth in connection with the formation of cash income and savings among business entities and the state, as well as their use for expanded reproduction , material incentives for workers, satisfaction of social and other needs of society.

The condition for the functioning of finance is the availability of money, and the reason for the emergence of finance is the need of business entities and the state for resources that support their activities.

Finance is indispensable because it makes it possible to adapt the proportions of production to the needs of consumption, ensuring in the economic sphere the satisfaction of constantly changing reproductive needs. This occurs through the formation of special-purpose monetary funds. The development of social needs leads to changes in the composition and structure of monetary (financial) funds created at the disposal of business entities.

With the help of public finance, the scale of social production is regulated in sectoral and territorial aspects, the environment is protected and other social needs are met.

Finance is objectively necessary, as it is determined by the needs of social development. The state can, taking into account the objective need for financial relations, develop various forms of their use: introduce or abolish various types of payments, change the forms of use of financial resources, etc. The state cannot create something that is not objectively prepared by the course of social development. It establishes only the forms of manifestation of objectively mature economic relations.

Without finance, it is impossible to ensure the individual and social circulation of production assets on an expanded basis, regulate the sectoral and territorial structure of the economy, stimulate the rapid implementation of scientific and technological achievements, and satisfy other social needs.

Finance is an integral part of monetary relations, therefore their role and significance depend on the place monetary relations occupy in economic relations. However, not all monetary relations express financial relations. Finance differs from money both in content and in the functions performed.

Money is a universal equivalent, with the help of which the labor costs of associated producers are primarily measured, and finance is an economic instrument for the distribution and redistribution of gross domestic product (GDP) and national income, an instrument for controlling the formation and use of funds of funds. Their main purpose is to ensure, through the formation of cash income and funds, not only the needs of the state and enterprises for funds, but also control over the expenditure of financial resources.

Finance expresses the monetary relations that arise between:

enterprises in the process of acquiring inventory, selling products and services;
enterprises and higher organizations when creating centralized funds of funds and their distribution;
the state and enterprises when paying taxes to the budget system and financing expenses;
by the state and citizens when making either taxes or voluntary payments;
enterprises, citizens and extra-budgetary funds when making payments and receiving resources;
individual parts of the budget system;
property and personal insurance authorities, enterprises, the population when paying insurance premiums and compensation for damage, upon the occurrence of an insured event;
monetary relations mediating the circulation of enterprise funds.

The main material source of monetary income and funds is the country's national income - the newly created value or the value of the gross domestic product minus the tools and means of production consumed in the production process. The volume of national income determines the possibilities of meeting national needs and expanding social production. It is by taking into account the size of the national income and its individual parts - consumption income and the accumulation fund - that the proportions of economic development and its structure are determined. This is why all countries attach importance to national income statistics.

Without the participation of finance, national income cannot be distributed. Finance is an integral link between the creation and use of national income. Finance, influencing production, distribution and consumption, is objective in nature. They express a certain sphere of production relations and belong to the basic category.

A modern economy cannot exist without public finance. At certain stages of historical development, a number of needs of society can only be financed by the state. These are the nuclear industry, space research, a number of new priority sectors of the economy, as well as enterprises that are necessary for everyone (mail, telegraph and some others).

Finance reflects the level of development of production forces in individual countries and the possibility of their influence on macroeconomic processes in economic life. The state of the country's economy determines the state of finances. In conditions of constant economic growth, increasing GDP and national income, finance is characterized by its sustainability and stability; they stimulate the further development of the production of life for the country's citizens.

Finance as a scientific concept is usually associated with those processes that appear on the surface of social life in various forms and are necessarily accompanied by the movement (cash or non-cash) of funds. Whether we are talking about the distribution of profits and the formation of intra-economic funds at enterprises, or the transfer of tax payments to state budget revenues, or the contribution of funds to extra-budgetary or charitable funds - in all these and similar financial transactions there is a movement of funds.

To understand the essence of finance, it is necessary to identify those general properties that characterize the internal nature of all financial phenomena.

If we ignore the numerous specific forms in which financial processes take place, we can see the common thing that unites them - the underlying relationships between the various participants in social production, or social relations, that underlie financial transactions.

2. TAX POLICY OF RUSSIA

The tax system arose and developed since the formation of the state. The development and change in forms of government invariably entailed a transformation of the tax system. With the development of the state, taxes gradually became the main source of replenishment of the state treasury.

The socio-economic essence, role and purpose of taxes are determined by the economic and political system of society, the nature and objectives of the state, as well as the history of the formation of the tax system.

Taxes are used to finance expenses related to ensuring the defense of the country (maintenance of the army, military, sea and air fleet), the protection of citizens (financial support for the police, firefighters, emergency response services), the creation of a healthcare system, education, culture, science, maintenance controls, etc.

The ratio of taxes paid by legal entities and individuals varies from country to country. In Russia at the present stage, the bulk of budget revenues is provided by tax payments of legal entities. The share of taxes from citizens is not yet high enough due to the low incomes of the majority of the population and the lack of accumulated property. But gradually in the tax system of Russia, like most developed countries, there is a shift in the tax burden from organizations to individuals.

Citizens of any state contribute various taxes, fees and duties to the treasury. Most citizens pay several taxes at the same time: income tax and a series of property taxes, which in most countries are considered taxes on accumulated wealth.

Since 1992, a new tax system has been in force in Russia, the basic principles of which were determined by the Law “On the Fundamentals of the Tax System in the Russian Federation” dated December 27, 1991. He established a list of taxes, fees, duties and other payments going into the budget system; Payers, their rights and obligations, as well as the rights and obligations of tax authorities are determined.

The most difficult problem in developing a new tax system was the need, at a minimum, to maintain the previously established level of state income, since objectively it was impossible to immediately refuse funding due to a number of social expenses, measures to support individual and life support areas. Solving this problem was complicated, on the one hand, by the fall in production and the resulting narrowing of the tax base, and by the need for the state to bear the burden of additional expenses, other than to compensate for the social costs of reforms.

The preservation of the minimum required level of government revenues was facilitated by the introduction of a value added tax with a very high tax rate by international standards, a very rigid, inflexible profit tax regime, providing for additional taxation of increased labor costs, as well as the absence of mechanisms for compensating taxpayers’ losses due to the manifestation of under conditions of high inflation, the effect of the so-called “inflation tax”.

Taking into account the accumulated experience in applying the new tax system, a significant number of various changes and additions were made to the tax legislation.

This package of tax laws that made up the federal tax legislation includes, first of all, the basic Law “On the Fundamentals of Tax Issues in the Russian Federation”, which defines the general principles of building the tax system, its structure, the organization of tax collection and control over their collection, the rights and responsibilities of taxpayers, a list of taxes and fees and a number of other fundamental provisions of the tax system.

The various forms of tax withdrawals provided for by the tax system depend on the sources and types of income: profit, wages, dividends, etc.; object of taxation (various types of property, including land, other types of real estate; inventory, movement of goods abroad, etc.); categories of payers (legal entities and individuals; high and low paid employees; residents and non-residents, etc.).

When embarking on reform of the tax system, the government took into account the extremely painful process for the majority of former state-owned enterprises of the process of radical disruption of the existing economic structure. The entire system of economic priorities and incentives has changed dramatically, accompanied by a fall in production and effective demand. State orders sharply decreased, external borders were opened for commodity intervention from abroad. Producers of raw materials and energy have established price dictates.

In this regard, within the framework of the new tax system, certain elements of the old economic mechanism were temporarily retained, including some non-market instruments: taxation of enterprise expenses used to pay employees in excess of the legally established level. “Market prices” were artificially calculated as the tax base. The so-called “financial assistance” and fines were subject to VAT. Tax incentives that were unjustified from the point of view of creating an effective competitive environment were retained.

The tax system operating in the Russian Federation in the 90s was characterized by the following features. A very high proportion of indirect taxes, in particular duties and excise taxes. Relatively small share of direct taxes and fees. Orientation when choosing priorities between objects of tax exemption, primarily on the taxation of enterprises and organizations and, to a lesser extent, on individuals. The tax base expanded as a result of the involvement of previously exempt legal entities and individuals in the payment of taxes. A number of new tax payments have been introduced, bringing into the orbit of taxation such objects as property, inheritances, transactions with securities, special types of activities, the use of prestigious names and some others. At the federal level, a wide range of various tax benefits have been introduced, aimed primarily at stimulating the production of vital goods for the population, etc.

Naturally, the accumulated problems required further steps towards improving the Russian tax system, which are reflected in the Tax Code of the Russian Federation. The problem of taxes in Russia is not only economic, but also socio-political. In modern conditions, all industrial enterprises of all forms of ownership must pay income tax at a single rate of 24% (previously the income tax rate was 35%). At the same time, numerous tax benefits were cancelled. As a result, changes with a predominance of fiscal goals led to the fact that the overall tax pressure on the profits of joint-stock companies and large enterprises with foreign capital began to amount to up to 80-90 kopecks due to a number of mandatory fees and taxes. profit from 1 ruble. Thus, a large part (about 13%) of the country's gross domestic product is taken from enterprises, which reduces the investment opportunities of enterprises.

A single personal income tax rate has been introduced - 13%. Proponents of this approach consider this to be great progress and a factor that will restrain the transfer of income “to the shadows.” Opponents argue that the issue of reducing the tax burden in Russia is not obvious. Countries with a high tax burden on large incomes ensure higher social standards. Related to this are the proposals that have emerged regarding the introduction of a corporate social tax in Russia, that is, the transfer of the tax burden associated with education, healthcare, etc. from individuals to the business sector

The totality of taxes, fees, duties and other payments levied in accordance with the established procedure form the tax system. The tax system is headed by the State Tax Service of the Russian Federation, which is part of the system of central government bodies of Russia, reports to the President of the Russian Federation and the government and is headed by a leader with the rank of minister.

The main task of the State Tax Service of the Russian Federation is control over compliance with tax legislation, the correctness of their calculation, the completeness and timeliness of payment of state taxes and other payments established by law to the relevant budgets. According to Article 57 of the Constitution of the Russian Federation, everyone is obliged to pay legally established taxes.

The Law “On the Fundamentals of the Tax System in the Russian Federation” introduces a three-tier taxation system for the first time in Russia.

1. Federal taxes are levied throughout Russia. In this case, all amounts collected from 6 of the 14 federal taxes must be credited to the federal budget of the Russian Federation.

2. Republican taxes are generally obligatory. In this case, the amount of payments, for example, for the property tax of enterprises, is credited in equal shares to the budget of the republic, region, autonomous entity, as well as to the budgets of the city and district in which the enterprise is located.

3. Of the local taxes (and there are 22 in total), only three are generally binding: tax on; property of individuals, land, as well as registration fees from individuals engaged in entrepreneurial activities.

And another important tax in market conditions is on advertising. It must be paid by legal entities and individuals advertising their products at a rate of up to 5% of the cost of advertising services.

Main taxes levied in Russia:

Federal taxes :

value added tax;
federal payments for the use of natural resources;
excise taxes on certain groups and types of goods;
income tax;
bank income tax;
personal income tax;
tax on income from insurance activities;
taxes are the sources of road funds;
tax on transactions with securities;
stamp duty;
customs duty;
National tax;
deductions for the reproduction of the mineral resource base;
tax on property transferred by inheritance and gift;
tax on exchange activities.

Republican taxes and taxes of territories, regions, autonomous entities :

Republican payments for the use of natural resources;
forest tax;
corporate property tax;
payment for water taken by industrial enterprises from water management systems.

Local taxes:

land tax;
registration fee for individuals engaged in entrepreneurial activities;
property tax for individuals;
fee for the right to trade;
tax on the construction of industrial facilities in the resort area;
targeted fees from the population and enterprises of all organizational and legal forms for the maintenance of the police, for
improvement and other purposes;
resort fee;
tax on the resale of cars and computers;
advertising tax;
license fee for the right to trade in wine and vodka products;
collection from dog owners;
fee for issuing a warrant for an apartment;
license fee for the right to conduct local auctions and lotteries;
fee for the right to use local symbols;
vehicle parking fee;
fee for winnings at the races;
fees for participation in races at hippodromes;
collection from persons participating in betting games at the hippodrome;
collection from transactions carried out on exchanges, with the exception of transactions provided for by legislative acts on the taxation of transactions with securities;
fee for the right to conduct film and television filming;
fee for cleaning the territories of populated areas;
other types of local taxes.

Let us now consider the role of the tax system in the economic development of the country .

Each socio-economic formation is characterized by its inherent system of state revenues, determined by the level of development of commodity-money relations, the method of production, the nature and functions of the state.

Since its inception, state revenues have undergone significant evolution. Various kinds of in-kind duties and fees have existed since ancient times, and with the development of commodity-money relations they gradually gave way to monetary taxes and fees. Along with tax revenues, state income includes state credit (state loans), income from various types of state fiscal monopolies, as well as income from the use of state property and from its sale.

Modern budget systems include the budgets of the central government, regional authorities and local governments. Government revenues are generated mainly through taxes. Until the 20th century excise taxes, customs duties and fiscal monopolies dominated the structure of government revenues. Direct real taxes are gradually giving way to more elastic personal taxes, mainly income taxes, as well as inheritance and gift taxes, etc.

Until the early 1980s. there was a tendency to increase the share of government revenues in the total volume of the total social product and national income. If on the eve of the First World War the state accumulated about 15% of national income, then in the 1980s. - already 40-50%. The main form of tax revenue mobilization in most developing countries is indirect taxes. As industry and trade develop, the scope of indirect taxation of locally produced goods expands. Customs duties play an important role. The most significant share of revenue from customs duties is in the budgets of the least developed and small countries, as well as in countries that export raw materials. In industrialized countries, the share of revenue from customs duties averages about 5% of budget revenues. In oil-producing countries, export customs duties are one of the main sources of government revenue. Along with the strengthening of indirect taxation, direct taxes, especially income taxes, have acquired great importance.

Most of the government revenues of developed countries are concentrated in state budgets, where the largest revenues are received. The most important central government taxes (federal taxes) include: income tax, corporation tax, VAT, excise taxes and customs duties. Local budgets receive income from local agriculture, income from loans from local authorities, and subsidies from the central government. The main regional and local taxes include property and land taxes, as well as, in some countries, excise taxes. The income of state-owned enterprises consists of profits, loans, government subsidies and loans. Numerous special state funds are formed through special taxes and fees, voluntary contributions, budget subsidies and loans. In a number of countries, the state social insurance fund is an integral part of the state budget; in other countries, an autonomous fund is created, formed through mandatory contributions (contributions) from employees, entrepreneurs, liberal professions, as well as state subsidies.

Taxes are the main form of mobilizing government revenues in countries with market economies. In the budgets of central governments they make up from 70 to 90% of all revenues; in local budgets the share of tax revenues is usually about half. Due to taxes and fees redistributed through the state budget, part of the financial resources of state and municipal enterprises (in the Russian Federation - unitary enterprises) and a number of special funds is formed.

The share of national income redistributed through the system of taxes and fees depends on the tasks and functions of the state. In those countries where the state is particularly active in implementing social policy (Scandinavian countries, France, Germany, etc.), the share of state-owned national income is usually higher. The total size of tax exemptions and their share in national income are significantly influenced by factors such as militarization, forms and methods of government intervention in the economy, and the size of state property.

3. BUDGET POLICY OF RUSSIA

If you look at the Modern Economic Dictionary from page 38 - "boom" to page 41 - "gross turnover" , then you will not encounter such a thing as a budget system at all. However, in the textbook “Finance, Monetary Circulation, Credit” edited by Professor Corresponding Member of the Russian Academy of Natural Sciences L.A. Drobozina on page 199 can find the following definition:

« The budget system is the totality of all budgets operating on the territory of the country." .

Such a definition only reveals to us the structural component of this concept, leaving the functional-target aspect of the term to the conscience of the reader. (I would not like to provoke a biased opinion towards the said textbook; it is perfectly balanced as an introductory course to the theory of finance).

On the other hand, the budget system can be defined as one of forms of expression of state financial policy . Government implements its financial policy through the budget system, which acts as mechanism of action states on society.

In the context of the transition to a market economy, the state’s ability to regulate financial relations is reduced (indeed, in a planned economy, not only price and wage levels were administratively established). At present, the Government can dictate prices only on natural monopolies (the overwhelming majority are state-owned), on precious metals and weapons. Regulation of the credit sector occurs only at the level of the Central Bank, although previously the entire credit sector was controlled by the state. In this regard, what comes to the fore is not so much the development of new technologies for implementing the control and directing functions of the state (represented by the executive branch), but improvement Fine famous and verified mechanisms impact. An interesting historical note: in Western practice, Parliament entangles the executive power with a whole network of laws - the USA - more than 7000, Belgium - about 3000. Before the start of Gorbachev’s reforms, about 100 laws were adopted in Russia per year, during his reign - 200. Now about 100 are adopted in a year .

Since the beginning of fundamental reforms in 1991, the Government of the Russian Federation has been carrying out a very large range of economic activities, the main directions of which are:

a set of measures to ensure the transition to a market economy.
a set of measures related to economic stabilization.
social support of the population.

There are incentives for this: thoughtful taxation, low military spending, a favorable financial mechanism for attracting foreign investment, and as a result, Hong Kong's GDP per capita is higher than in England. And this is an indicator of the well-being of the country's population.

The relationship between the directions of the financial policy of our state varies over time and is determined to a greater extent situationally: in 1991, the tasks of transition to a market were in first place, in 1992 - the economic crisis, a sharp increase in prices, the question arose no longer about market reforms, but about stopping decline in production and inflation rates, on the eve of elections and referendums, social issues come first. However, we will be interested only in the second and third points, since they determine the ways of restructuring the budget system of the Russian Federation. Among the innovations directly related to the budget system (especially its expenditure part) we can highlight:

From the above, we can conclude that the Government has taken the right course to boost the Russian economy (although some aspects of the Russian Federation’s economic policy raise questions not only among economists, but also other categories of workers) and to ease social tension in society. However, it is impossible to understand the role of the budgets of the Subjects of the Federation in the overall reform flow without considering its place in the State Budget of the Russian Federation.

The budget of the constituent entities of the Russian Federation as an organic part of the state budget.

The budgetary structure of our country ensures continuous interconnection of budgets of all levels (federal, federal subjects and local). (see Table 1)

Table 1. Relationships in the budget system of the Russian Federation.

The state budget system of the Russian Federation (hereinafter referred to as the GBS RF, the Budget system of the constituent entities of the Russian Federation - BSS RF) consists of 21 republican budgets, 55 regional and regional budgets, city budgets of Moscow and St. Petersburg, 10 district budgets of autonomous okrugs, the budget of the autonomous Jewish region , as well as about 29 thousand local budgets (city, district, township, rural).

In general, the principles of construction and functioning of budgets at all levels are the same:

the principle of unity expresses the need to coordinate budgets with a unified legal and documentary policy, a unified budget process;
the principle of transparency requires mandatory publication of approved budgets in the media;
the principle of reality asserts the need for the truthfulness of all budget indicators;
the principle of independence is determined by the presence of budgets at all levels of their own sources of income and the right to spend them without permission (within the framework of current legislation). The budgets of lower-level self-government bodies do not include their income and expenses in the budgets of higher levels.

In general, any budget is connected by monetary relations that are objective in nature, that is, the existence of the budget is objectively determined, it exists in all socio-economic formations where financial relations existed, thus it can be argued that the budget is an economic category closely related to the existence states.

The budget of the constituent entities of the Russian Federation is an integral structural part of the state budget (see Table 2).

Table 2

Structure of the State Budget

THE STATE BUDGET

FEDERAL BUDGET
Expenditure part	Revenue part
BUDGETS OF THE ENTITIES OF THE RUSSIAN FEDERATION
Expenditure part		Revenue part
LOCAL BUDGETS
Expenditure part			Revenue part

It, like the entire state budget as a whole, must serve the functions of the state and its main purpose is to meet state needs. The essence of the state budget is the monetary relations that arise between the state and other participants in social production in the process of distribution and redistribution of the value of the social product and some part of the national wealth through the formation of certain centralized funds and their use either for the purpose of expanded production, or to satisfy social and other public needs.

It should be noted that the concept of budget is diverse:

as an economic category - a set of economic relations;
centralized fund of the state and various government agencies;
a financial plan drawn up and adopted annually into law.

In addition, the budget as a category of finance has its own distinctive features:

it is always associated with the state - one of the participants in distribution relations;
The budget has a different object of distribution. With the help of finance, GDP and its components are distributed, and the budget is only a part of GDP or ND. For example, depreciation and excess working capital are not distributed through the budget. Its main part is net income. Under certain conditions, the budget is involved in the distribution of national wealth (privatization, confiscation, proceeds from the sale of gold reserves, etc.);
The budget is basically a redistribution instrument.

The importance of such a concept as a budget is emphasized by the presence of a whole budget system in the Russian Federation. Below we will look at its functions and role in society.

Functions and role of the budget system.

As has been repeatedly shown above, the state budget system is an extremely important category of finance and an instrument of financial policy. This is facilitated by the functions it performs:

economic (provides financing for the most important national economic facilities and subsidies for enterprises and industries of great importance). In many ways, the role of the budget system is determined by the specific economic situation (for example, the banking crisis in South Korea, when it was decided to allocate $7 billion to the largest insolvent banks; the United States during the Second World War - it was necessary to increase the output of military products - there were state capital investments, construction through state injection nuclear industry; another example is industrialization).
an important tool for intersectoral and interterritorial distribution of resources. With the help of taxes and subsidies, some industries are limited and others are subsidized, and in many countries of the world the budget is the main instrument for supporting the development of weak areas;
social (the state provides free education, treatment - partial or full funding from the budget). Even now, with spending cuts, the budget is the main tool for supporting low-income citizens; the population is equalized through income tax. In Western countries, the share of social spending (health care, education, assistance to the poor) is almost 60% of the budget in the United States. That is, the budget is the main lever of equalization in the social sense);
political (financing the army, law enforcement agencies). Until the mid-19th century, military expenditures were the main element of expenditure (18th century - Russia - 90%);
NTP (financing of basic sciences, state scientific and technical projects);
financing of public authorities.

It should be noted that the concept of a priority function of the budget system does not exist - each state independently selects the dominant item of expenditure based on the specific economic and political situation. However, in any case, a specific decision does not affect the role of the budget system in the country.

The most striking indicator of the role of the budget is the ratio of state budget revenues (expenses) to GDP. I believe that it is more reliable to calculate the indicator by expenditure, since it is they, and not the underestimated income, that determine the degree of state participation in the distribution process.

At the global level, this figure tends to increase. For example, Germany in 1972 - 24%, now - 29% (after the unification of the Federal Republic of Germany and the German Democratic Republic, the value of the indicator jumped sharply - this is due, first of all, to the costs of the process of integration of the national economy and servicing intrastate population migration).

Many reasons have been cited for the growth of this indicator on a global scale. In my opinion, one of the most important, if not the main one, is the redistribution of emphasis in world politics and economics: the collapse of the USSR, the rapid economic growth of Asian countries (especially China), the acceleration of European integration, the US counteraction to the growing influence on the world leadership of the last two reasons. This entails an increase in the role (share) of the state in the distribution (and redistribution) process, albeit under the dominance of a market economy. In Russia this figure is 39% (650 trillion/1659 trillion), the USA - 36%. In the Netherlands in 1989, only for the central authorities - 54%. However, it is necessary to make an appropriate amendment - according to the State Statistics Committee, 28% of GDP goes to accumulation, and this is the renewal of fixed and working capital.

Thus, we can conclude that the role of the budget system, especially the expenditure side of the budget, is incredibly important not only in countries with planned economies (in my opinion, there is still one such country left - this is northern Vietnam). Developed capitalist countries pay great attention to the budget system as an extremely powerful mechanism for the distribution (and redistribution) of national wealth. Through the BS, the state can set development priorities not even for the economy, but for society as a whole.

CONCLUSION

From all of the above, we can conclude that finance is an integral part of monetary relations and plays a huge role in the formation, distribution and use of centralized and decentralized funds of funds in order to perform the functions and tasks of the state and ensure conditions for expanded reproduction. We can also say that finance is objectively necessary, as it is determined by the needs of social development. The state can, taking into account the objective need for financial relations, develop various forms of their use: introduce or abolish various types of payments, change the forms of use of financial resources, etc. The state cannot create something that is not objectively prepared by the course of social development. It establishes only the forms of manifestation of objectively mature economic relations. Without finance, it is impossible to ensure the individual and social circulation of production assets on an expanded basis, regulate the sectoral and territorial structure economically, stimulate the rapid implementation of scientific and technical achievements, and satisfy other social needs.

In my course work, I examined the role of finance in regulating the state economy, tax policy, as well as the budget policy of Russia.

BIBLIOGRAPHY

Perov A.V., Tolkushkin A.V. Taxes and taxation. 2005. - P. 225
Maltsev V.A. Tax law. 2004. - pp. 94-105.
Raizberg B.A. and others. Modern economic dictionary. -M.: Infra-M, 1997.
Gavrichina E.L. Kashaev A.N. State and law. Tutorial. -M., 1997.
Finance, money circulation, credit. / L.A. Drobozina et al. - M., UNIT Finance, 1997.
Perov A.V., Tolkushkin A.V. Taxes and taxation. 2005. - 545 p.
//zh-l “Library of the journal “Accounting” No. 3, 1998.
Chernik D.G. Taxes in a market economy. - M., 2001. - 367 p.
Yutkina T.F. Taxes and taxation. - 2nd ed., revised. and additional - M.: Nauka, 2002. - 457 p.

The financial system, as an economic category, provides for the operation of centralized and decentralized budget funds in order to ensure economic activity and redistribute benefits in society.

In practice, regardless of the political structure and characteristics of the economic system, any state cannot do without finance.
The historical experience of totalitarian regimes shows that, despite the ideological overtones that exclude any manifestations of capitalism, the socialist countries could not abandon financial and commodity-money relations.
This fact confirms the special role of finance in the economy, since finance can exist without government regulation, but the state cannot fully function without finance.

Characteristics of the financial system!

So, finance is a tool for realizing economic and social development. In socialist countries it is necessary to ensure the interests of the party elite and privileged classes, in democratic countries it is necessary to organize highly efficient production and equal distribution of resources.

However, not only states are capable of managing finances. In conditions of market relations, legal entities and, directly, the population can also act as subjects of financial activity.

This implies the following characteristics of the financial system, consisting of two components:

Social or community finance
Finances belonging to the business entity - the owner

Each element of the system has distinctive features and serves to solve certain problems, but together they form a single whole - a financial system capable of functioning in the market of the same name, which, together with the labor market, as well as the market for goods and services, forms a market economy.

The role of finance in the economy: features!

With the fall of the countries of the socialist camp at the turn of the 80-90s. XX century, the development of market relations moves to a qualitatively new level. Globalization everywhere overcomes the administrative boundaries of old and new states that have switched to capitalist systems. At the same time, the role of finance in the economy is increasing significantly.

The movement of large capital, provoked by TNCs, sets new rules of the game for enterprises in a competitive environment. And today, the success of an economic entity fully depends on the financial position in the market, competitiveness and further development prospects.

At the same time, the mission of the financial system, in the realities of a market economy, has the following features:

Distributive role finance!

Thanks to finance, GDP, GNP, labor, material and natural resources are distributed among certain sectors of the economy, individual regions, as well as economic entities. In addition, they are necessary for the implementation of the state’s social policy, which is also based on the redistribution of material benefits, in particular pensions, scholarships, benefits and subsidies.

Role in reproductions!

Finance contributes to the creation of the necessary funds at various levels of the national economy - accumulation and consumption funds, capital restoration funds, production cost recovery funds.

Monitoring role!

This role of finance comes down to control over the macroeconomic indicators of the national economy. Financial control is also applicable to individual business entities. Based on the size of taxes and payroll, it is possible to analyze the scale and production capacity of a particular organization.

Stimulating role!

Financial incentives are carried out using a whole range of methods, including: the creation of incentive mechanisms; exploitation of budget resources – tax benefits; application of sanctions in case of late payment of a loan, concealment of income, deliberate falsification of a tax return.

Regulatory role!

Through the financial system, the state influences specific enterprises and entire sectors of the economy by providing benefits, loans, canceling or introducing tax rates, etc.

Social role!

This role of finance is directly dependent on the social policy of organizations and the state as a whole. The enterprise, through sponsorship and responsibilities established by law, contributes to the creation of the infrastructure necessary for society and ensures the replenishment of the country's municipal budgets.
In turn, the state, through certain social insurance and security funds, makes an even redistribution of budget funds in society.

Political role!

Finance also plays a political role. If used effectively, they can ensure the success of domestic and foreign policy by the country's leadership, influence the implementation of measures to modernize the defense system, which has a positive effect on the economic and political independence of the state.

So, the role of finance in the economy is difficult to overestimate. They act as instruments for the effective functioning of the country’s economic, political and social system, being one of the key elements of capitalist relations that dominate throughout the world.

Finance in its meaning is a very complex, multifaceted component of economic phenomena and processes, the economic system as a whole; the use of finance makes it possible to successfully realize the ultimate goal of economic and social development.
Finance is not only an indicator of the level of economic development of a society, but also an important tool for this development. Depending on the knowledge of the economic essence and role of finance in the state, their use to achieve the goal is determined.
Finance plays its role through the forms, methods of creating and using financial resources together with other economic categories.
Finance reaches its highest development and perfection in a market economy, the transition to which is characterized by a sharp change in the influence of finance on the reproduction process. There is a qualitative and quantitative transition to a new level of use of finance in the country’s economic system.
The fulfillment by the state of a set of tasks related to ensuring its existence and effective functioning gave rise to the emergence of a wide arsenal of financial methods of state regulation of the economy. The state has certain levers for this, which include a list of instruments that can influence certain economic processes in the country, in particular the redistribution of economic resources, the economy as a whole, and regulates socio-economic relations with other countries.
An important role belongs to the finances of economic structures. The creation and use of financial resources in this area is subordinated to the goal of increasing the efficiency of economic activity. This is possible by directing funds of financial resources to new technologies, better use of fixed assets, and accelerating the turnover of working capital.
With the help of finance, business entities have the opportunity to provide solutions to production and socio-economic problems of their functioning.
The active and effective use of finance to improve the efficiency of the economy becomes possible when funds of financial resources at the level of business structures complement the corresponding funds at the state level.
The role of finance is also significant in solving social problems. The state carries out measures for socio-economic development through financial support for social processes, the implementation of its social policy (at the level of each citizen, economic structures, as well as funds of financial resources as part of budgets).

7. Financial resources, essence, composition and methods of formation
Society's finances as an economic category are characterized not only by economic relations, but also have material content. Monetary funds and savings that are created by the state, enterprises, institutions, organizations in the process of distribution and redistribution of GDP and national income represent financial resources.
Financial resources characterize the financial state of the economy and at the same time the source of their development.
The state's financial resources cover the resources of all sectors of the economy. In each sector, financial resources are distributed across levels of management. The state has at its disposal the resources of the budget system, various centralized and decentralized funds, state financial institutions (National Bank, state insurance authorities, state credit institutions).
Taking into account the definition of finance as a system of specific economic relations, it can be argued that financial resources are centralized and decentralized monetary funds for special purposes, which are formed in the process of distribution and redistribution of national wealth, gross domestic product and national income and are intended to solve social problems. economic development of society and teams of individual enterprises.
Centralized monetary funds are concentrated in the state and represent national financial resources. The leading place in the system of national financial resources belongs to the state budget.
The main source of formation of the state budget is the net income created in the areas of material production, which goes to the budget in the form of payments from profits, value added tax and other tax and non-tax payments. A certain part of state budget revenues is generated from taxes and other payments of the population. The budget finances expenses for the development of science, culture, education, healthcare, management, defense, social protection of the population and other national needs.
The system of national financial resources of Ukraine includes the Pension Fund, Social Insurance Funds, and other budgetary and extra-budgetary funds for social purposes.
Decentralized financial resources or financial resources of business entities represent the funds that they have at their disposal. These funds can be used to develop production, maintain and develop non-production facilities, personal consumption of workers and the reserve fund.
The total amount of financial resources of a business entity consists of such elements as the authorized capital, reserve fund, depreciation fund, special funds and other funds.
The main source of financial resources is the gross domestic product. The largest element of them is created from profits, contributions to social insurance and other social needs.
The main methods by which financial resources are generated:
collection of taxes;
deduction of part of the profits of state enterprises;
deductions for social insurance and other types of deductions to centralized funds;
sale of property and securities;
obtaining loans;
emission of money.
Most financial resources are the monetary expression of the value of the net income generated in the state. This is profit, contributions to state trust funds, income from foreign economic activity.
The second part of financial resources is part of the consumption fund. These include direct and indirect taxes levied on the population, value added tax, excise duty, land charges, tax on vehicle owners, local taxes and fees.
The third part of the financial resources consists of various deductions that are included in the cost of production. These are depreciation deductions, deductions for geological exploration, payments for water, etc.
Income received as a result of economic activity is spent in the main areas of their use.
Financial resources are used for expanded reproduction, financing scientific and technological progress, carrying out environmental protection measures, material incentives for workers, and meeting social and other needs of society. The forms and methods by which financial resources are formed and used are not constant and change depending on changes in the social nature of society.
The financial resources created and used in society are united by a system of indicators and take the form of the state’s financial balance.
The system of financial balances includes:
balance of financial resources and state expenses;
state budget and local budgets;
balances of financial resources and costs of regions, districts, cities;
balances of income and expenses of ministries, departments, individual financial institutions, enterprises, organizations, and the population.
Financial balance is important in the state's economic management system. It characterizes the capabilities of a state or a separate region regarding financial support for their economic and social development.

One of the elements of financial resources are financial reserves, which are funds that are deliberately removed from economic circulation and are intended for use in cases of failures in the process of social reproduction.
Financial reserves are created only in cash, and their creation is a necessary condition for the normal development of the economy.
Basic methods of forming financial reserves:
Budgetary (the creation of a reserve fund as part of each budget. The State Budget of Ukraine necessarily provides for a reserve fund. The decision on the need to create a reserve fund of the local budget is made by the relevant authorities);
Sectoral (creation of reserves at the level of ministries, industries, departments based on deductions from the profits of subordinate enterprises and costs of assistance to these enterprises);
Self-supporting (formation of financial reserves of enterprises, organizations, institutions. Such reserves are most common in agriculture. The state legally establishes a mandatory procedure for the formation of a reserve fund for joint-stock companies in the amount of 25% of the authorized capital);
Insurance (creation of funds of insurance organizations. Funds are created from contributions of insurance participants, and only these participants can claim payments from insurance funds).
One of the types of budget reserves is the reserve fund of the State Budget of Ukraine. Its creation, unlike local reserves, is mandatory. It is formed to implement unforeseen expenses that are not of a permanent nature and could not be foreseen when drawing up the draft State budget for the corresponding year. This fund is created in the amount of at least 1% of the expenditures of the general fund of the State budget and is included in the expenditures of the State budget.
The procedure for using funds from the reserve fund of the State budget is determined by the Cabinet of Ministers of Ukraine.
The main direction of using the funds of the reserve fund of the State Budget of Ukraine is:
Financing costs associated with emergency situations;
Financing of work to eliminate the consequences of natural phenomena and accidents;
Unforeseen costs associated with the introduction of new laws;
Other activities that could not be foreseen at the time of approval of the State Budget.
At the same time, a requirement was established according to which funds from the reserve fund of the State Budget of Ukraine cannot be used to pay off government debts and to increase the amounts of expenditure items provided for in the State Budget.
The Cabinet of Ministers of Ukraine reports monthly to the Verkhovna Rada on the use of funds from the State Budget Reserve Fund.
One type of financial reserves is the country's gold and foreign exchange reserves.