Rada passes state budget 2026 in first reading: hromadas retain 64% of PIT
- News of Ukraine
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- Alina Kvitko
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16:14, 22 October, 2025

The Verkhovna Rada of Ukraine has adopted in the first reading draft law №14000 on the State Budget for 2026. The document was voted for by 256 MPs.
The main changes include retaining 64% of the personal income tax (PIT) for local budgets, which is the main source of community revenues. It is the PIT that finances the salaries of educators, doctors, utilities, transport maintenance, landscaping and social programmes.
It is worth reminding that in the initial version of the draft budget, the government proposed to reduce the share of PIT retained by communities to 60%, which would mean a loss of about 16 billion hryvnias across the country for local governments. For Mykolaiv, this means tens of millions of hryvnias that go to energy, city cleaning, and the maintenance of educational and medical institutions, see more about this in the article NikVesti: «City on taxes: why personal income tax cuts hit Mykolaiv».
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During the discussion of the draft law, MP Pavlo Bakunets (deputy group «Dovira») emphasised:
«We support this draft law in the first reading. Thank you for supporting local self-government by leaving communities 64% of taxes from official salaries of Ukrainians to get through this winter and the difficult heating season,» said Pavlo Bakunets.
In addition, the Parliamentary Committee on Budget recommended that the government
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When calculating the horizontal equalisation, take into account the current data of the State Statistics Service on the population and the Ministry of Social Policy on IDPs;
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work out the issue of repaying the difference in tariffs.
The second reading of the draft law on the state budget for 2026 is scheduled for 20 November, and the final adoption is scheduled for 1 December.
As a reminder, the bulk of local budget revenues comes from personal income tax (PIT). It is the source of funding for salaries of educators, doctors and public utilities, transport maintenance, street lighting, territory cleaning, kindergartens and hospitals.
In 2023, the state began to transfer part of the personal income tax paid by military personnel to the state budget. For frontline communities, including Mykolaiv, this was particularly noticeable: in 2024 alone, the city lost about 2.7 billion hryvnias.
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