Transformation of the Budget System of Ukraine in the Face of Extraordinary Challenges and Threats

Full-scale hostilities have had a significant impact on the budget system due to increased spending on defense, reconstruction, and humanitarian assistance to vulnerable groups, which has affected the accumulation of budgetary resources. The article examines the impact of extraordinary challenges and threats on the national budget system, in particular, on the structure and volume of budget revenues and expenditures, the growth of the budget deficit and public debt, changes in regulation in the field of public finance, and the potential of financial capabilities of the regions. The purpose of the article is to make a scientific and practical assessment of the problematic aspects related to the transformation of the budget system, to outline the ways of attracting financial resources that can be used for the purpose of distribution and redistribution to perform the functions of the State, to identify the main areas of influence of emergency challenges and threats on the budget system of Ukraine and the priority areas and measures of budget policy in wartime.The authors conclude that the strategic and main directions of Ukraine's development need to be improved in the strategy of public finance management and financial and economic security as part of the implementation of the Memorandum of Economic and Financial Policies by the IMF. At the same time, the relevant legislative changes to the state budget for 2023 that meet the needs of Ukraine are studied, and the implementation of the first preparatory stage for the development of the National Revenue Strategy is analyzed. The authors emphasize the positive impact of decentralization on local self-government and the financial sustainability of local budgets. It is proposed to empower communities through monitoring the implementation of local budgets. In the context of defense needs, the possibility of including defense expenditures during martial law in local budgets is considered.