Withdrawal of the «military» personal income tax: Sienkevych told about the loss of millions from the budget of Mykolaiv

Mykolaiv, photo: Johnnie Zigger

Mykolaiv has already lost 739.8 million hryvnias and will not receive 2.7 billion hryvnias in 2024 due to the withdrawal of the «military» tax on the income of individuals from the Mykolaiv budget.

This was announced by the mayor of Mykolaiv Oleksandr Sienkevych.

According to him, due to the loss of funds, the primary expenses of the community budget were reduced by 1.2 billion hryvnias. Oleksandr Sienkevych also said that the new Budget Declaration for 2025-2027 may lead to greater losses from the budget.

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«What else? The budget declaration for 2025-2027, submitted by the Government for consideration by the Verkhovna Rada of Ukraine, will lead to 2,840.0 million hryvnias of losses to the budget of Mykolaiv in 2025,» he said.

Losses will include:

• due to the reduction of the share of personal income tax in local government budgets from 64% to 60%, the community budget will lose about 140.0 million hryvnias;
• from the continuation of the withdrawal from the revenues of the budget of territorial communities of the «military» personal income tax, the expected losses will amount to 2.7 billion hryvnias at the level of 2024.

«This will not only deprive the community of the opportunity to help the defense forces and fight the consequences of hostilities and destruction, but will also make it impossible to finance the urgent needs of the city even in minimal amounts for the provision of educational services, social services, the implementation of works to maintain the satisfactory sanitary condition of the city, ensuring the functioning of systems of the city's water and heat supply,» the mayor is confident.

In this regard, the Association of Cities of Ukraine submitted its proposals for the protection of the budgets of communities, including Mykolaiv.

According to the association, it is necessary to determine on a permanent basis in the Budget Code of Ukraine and the Law of Ukraine «On the State Budget of Ukraine for 2025» the assignment of 64% of personal income tax to the budgets of territorial communities.

Also, the Association of Cities of Ukraine advocates proper compensation for the losses of communities due to the withdrawal of the «military» personal income tax at the level of 2021, an additional subsidy to communities damaged by the aggression of the Russian Federation, a full educational subvention, an increase in the capitation rate in medicine, compensation for the difference in tariffs, subventions for shelter, food, school buses and others.

Earlier it was reported that less than half of the funds withdrawn from the budgets of communities to support the Armed Forces of Ukraine were used for the needs of the military. In particular, out of 77.3 billion hryvnias received as personal income tax, only 32 billion hryvnias were spent.