The Verkhovna Rada increased defense spending by €8.64 billion

The Verkhovna Rada has approved amendments to the state budget, increasing defense and security spending by approximately €8.64 billion.

Bill No. 13573 was supported in full by 332 members of parliament, replacing a similar previous bill (No. 13439-3) that had been adopted in the first reading.

The new version excludes additional non-defense-related expenditures, such as funding for the Prosecutor’s Office, and removes the proposal to withdraw ₴8 billion from Kyiv’s budget.

• Total increase in national security and defense spending: ₴412.4 billion (approx. €8.64 billion)

• Breakdown of additional spending from the general fund: ₴401.6 billion (approx. €8.41 billion), including:

  • Ministry of Defense (incl. State Special Transport Service): ₴310.8 billion (~€6.51 billion)

  • Ministry of Internal Affairs system (Border Guard, National Police, National Guard): ₴84.1 billion (~€1.76 billion)

  • Security Service of Ukraine (SBU): ₴1.6 billion (~€0.03 billion)

  • Main Intelligence Directorate of the Ministry of Defense: ₴4.5 billion (~€0.09 billion)

  • State Special Communications Service: ₴0.0645 billion (~€1.4 million)

  • State Protection Directorate: ₴0.505 billion (~€11 million)

Sources of Funding:

To cover the increased expenditures, the government plans to:

• Increase state revenues by ₴147.5 billion (~€3.09 billion)

• Finance an additional ₴250 billion (~€5.24 billion) through debt operations, by:

  • Raising domestic borrowing by ₴184.9 billion (~€3.88 billion)

  • Reducing debt repayments by ₴65.1 billion (~€1.36 billion)

New PIT (Personal Income Tax) Allocation — effective August 1, 2025:

• 60% — Ministry of Defense (for drones, weapons, equipment): ₴22.4 billion (~€0.47 billion)

• 30% — State Special Communications Service (for drones)

• 10% — Direct needs of brigades

Reasons for Budget Revenue Revisions:

The budget changes are based on updated macroeconomic indicators from the Ministry of Economy (e.g. average wages, business profits), as well as growth in actual tax collections, including:

• PIT (Personal Income Tax): +₴56.0 billion (~€1.17 billion)

  • ₴46.0 billion to the general fund

  • ₴10.0 billion to the special fund

• Corporate profit tax: +₴23.8 billion (~€0.50 billion)

• Excise tax on imported tobacco: +₴8.8 billion (~€0.18 billion)

• Dividends and profits from state-owned enterprises: +₴15.0 billion (~€0.31 billion)

• Transfers from the National Bank of Ukraine (NBU): +₴20.3 billion (~€0.43 billion)