We had to lay off 43% of city hall employees, — Ochakiv mayor on city budget after military personal income tax was withdrawn

Ochakov Mayor Sergei Bychkov in his office, photo by «NikVesti»

After the removal of «military» personal income tax, almost half of the staff of the Ochakiv mayor's office had to be laid off.

This is described in the article NikVesti «Just 3.5 Kilometers From the Enemy: Ochakiv, a Resort Turned Frontline Town».

«They took away 87% of our budget. We were dependent on personal income tax, the military, and the SSU,» explained Ochakiv Mayor Serhii Bychkov.

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"Because of this, the city council had to lay off 43% of its employees.

«Those who work in the city council's service were laid off. There were a lot of redundancies. We had to do it because we did not have enough money. Of course, some of these people left. They were counted in the workforce, but they were in idle time. Some people retired, some people resigned on their own, some were made redundant and paid compensation. Here, the approach to everyone was individual. Unfortunately, this happened», said Serhii Bychkov.

He also said that this year Ochakiv received a subsidy from the state budget.

«The state provides subsidies. We got what we wanted for this year, thanks to everyone who helped us. But we don't know what will happen next year,» the mayor added.

What about military personal income tax?

In 2023, the Verkhovna Rada of Ukraine passed a law providing for the transfer of personal income tax (PIT) on the salaries of military and police officers not to local budgets, but to a special fund of the state budget.

At the time, the Association of Ukrainian Cities expressed the opinion that these funds would most likely disappear into the state budget, just like 36% of the current personal income tax, which is managed by the Ministry of Finance.

The Verkhovna Rada of Ukraine promised to allocate a subsidy to the communities of Mykolaiv region to compensate for the loss of personal income tax on military income.

The mayor of Mykolaiv, Oleksandr Sienkevych, said that the city's budget had lost 3.4 billion hryvnias in revenues due to the removal of military personal income tax. He added that the city council will be cutting staff due to the almost halving of the city budget. The company «Ernst & Young» is working on this.

Earlier, the mayor also expressed hope that the military personal income tax withdrawn from the Mykolaiv budget would be used to manufacture weapons, including drones for the Armed Forces of Ukraine.

Prior to that, MPs commented on the situation with the possible loss of military PIT. In particular, Artem Chornomorov, MP from the «Servant of the People party», criticised the Ministry of Finance and the Budget Committee of the Verkhovna Rada of Ukraine for the decision to remove the personal income tax paid by the military from the budget of Mykolaiv.

During a session of the Mykolaiv City Council, he said that he would not support the state budget for 2024 unless it was amended to retain the personal income tax paid by military personnel in frontline communities.

Ukrainian MP Maksym Dyrdin said that he would not introduce amendments to the 2024 state budget for Mykolaiv region. Unlike his colleague, MP Oleksandr Pasichnyi said that he is working on amendments to the state budget for 2024 to balance the revenues of the city of Mykolaiv with subsidies after the loss of personal income tax (PIT) paid by the military.

MP Ihor Nehulevskyi stated that he supports the removal of the military personal income tax (PIT) from community budgets, as the priority now is Ukraine's victory, so all other issues, including the daily needs of communities, should be put on the back burner.