Rada Budget Committee decides not to take away 4% of income tax from communities

The Budget Committee of the Rada decided not to take away 4% of the income tax from communities. Photo: NikVesti

The Budget Committee of the Verkhovna Rada of Ukraine has supported the recommendation to retain 64% of personal income tax (PIT) in local budget revenues.

This decision was made during a meeting of the committee as a proposal to the government in the preparation of the draft state budget for 2026.

Oleksandr Slobozhan, Chairman of the Association of Ukrainian Cities, thanked the MPs for supporting the initiative.

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«64% of PIT in local budgets was supported by MPs — members of the Budget Committee. I thank everyone who supported the initiative of the Association of Ukrainian Cities. I hope that the Verkhovna Rada will support the needs of local self-government. Let's work together!» said Oleksandr Slobozhan.

In her commentary to NikVesti, the Advisor to the Head of the Association of Ukrainian Cities clarified that during the work of the governmental working group that prepared the main part of the draft state budget for 2026, an agreement on 64% of PIT could not be reached.

«Unfortunately, there was no support for 64% in the working group. Now we need another round of approvals. We hope that the government will take into account the position of MPs and include the provision on 64% PIT in the revenues of communities in the second reading of draft law №14000,» she said.

Roksolana Pidlasa, Chair of the Verkhovna Rada Budget Committee, said that the committee had recommended the draft state budget for 2026 with a number of amendments for the first reading. In particular, for local budgets, it is proposed

• when calculating horizontal equalisation indicators for 2026, use the State Statistics Service's data on the population of communities and the Ministry of Social Policy's information on the number of internally displaced persons;

• to work out the issue of repayment of the debt on the difference in tariffs;

• consider the possibility of transferring an additional 4% of personal income tax (excluding military tax) to community budgets.

As a reminder, the government proposes to reduce the share of personal income tax that goes to local budgets from 64% to 60%. If the changes are adopted in the 2026 budget, communities across the country may lose ₴15.9 billion.

See also the article NikVesti: «Special economic zone for Mykolaiv: a chance to stop the outflow of business or a risk for the budget».

After a meeting of the Congress of Local and Regional Authorities on 7 October, the head of Mykolaiv's regional state administration, Vitalii Kim, said that the government would not reduce the share of personal income tax for frontline communities — it would remain at 64%.