In 2020, Ukraine introduced a new administrative and territorial structure at district and basic levels. The decentralization reform aimed to build effective local self-government and territorial organization of power to create and maintain a proper living environment for citizens, provide high-quality and accessible public services, strengthen direct democracy institutions, and align the interests of the state and territorial communities.
The first stage of the reform was the creation of amalgamated territorial communities that moved to direct interbudgetary relations with the State Budget of Ukraine. Territorial communities received powers and resources that previously belonged only to cities of regional significance, including a significant share of personal income tax as a key source of local budget revenues.