The government has prepared an updated draft state budget for 2026: more money is promised for Ukrzaliznytsia and salaries for teachers

The government has prepared an updated draft state budget for 2026 for the second reading. Photo: Slovo i Dilo

The Cabinet of Ministers of Ukraine has presented an updated draft state budget for 2026. It will soon be considered during the second reading in the Verkhovna Rada.

According to Prime Minister Yuliia Svyrydenko, the document's priorities remain security, defence and social sustainability.

What are the main changes?

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The Prime Minister noted that total state budget revenues will increase by ₴27.8 billion, mainly due to an increase in the corporate income tax rate for banks from 25% to 50%. Expenditures will also increase by ₴33.6 billion. Of this amount, ₴18.9 billion will be used to replenish the reserve fund, while ₴6.6 billion will be used to gradually increase salaries for teachers, university and vocational college professors by 50% over the course of the year.

Roksolana Pidlasa, the head of the Parliamentary Committee on Budget, clarified how the additional ₴30 billion in tax revenues for banks will be distributed:

• ₴4.3 billion, which should have gone to local budgets, will be used to purchase passenger cars for «Ukrzaliznytsia». Another ₴1.4 billion should be returned to the budget by the state enterprise «Financing of infrastructure projects» — a total of about ₴5.7 billion will be allocated for the purchase of railcars;
• at least 1 billion hryvnias were allocated for humanitarian land demining;
• dividends of the company «Ukrfinzhytlo» (₴1.27 billion) will be used for the preferential mortgage programme;
• the government will consider an additional increase in teachers' salaries from 1 September 2026 — beyond the planned 30% increase from 1 January.

The largest changes in expenditures, according to «Ekonomichna Pravda»:

• + ₴18.9 billion — reserve fund (in particular, to support «Ukrzaliznytsia»),
• + ₴6.6 billion — increase in salaries for teachers of higher education institutions,
• - ₴8.24 billion — reduction of funding for the State Border Guard Service (funds redistributed to the National Guard and the National Police),
• + ₴5.85 billion — for the National Guard,
• + ₴2.29 billion — for the National Police,
• + ₴1 billion — for compensation of property losses of business and insurance premiums against war risks,
• + ₴1 billion for the construction of shelters in kindergartens,
• + ₴528 million for public investment projects in healthcare (including the reconstruction of the Kharkiv Regional Children's Hospital),
• + ₴500 million to support relocated technical universities from the frontline areas,
• + ₴500 million to local budgets for housing for evacuees and internally displaced persons.

Earlier, the Verkhovna Rada of Ukraine adopted in the first reading the draft law №14000 on the State Budget for 2026.

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.

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 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: «Less Tax, Less City: What the PIT Cut Means for Mykolaiv».