Association of Cities insists on changes to the state budget-2026 to leave 64% of PIT in communities

The AUC insists on amending the Budget 2026. Photo: NikVesti

The Association of Ukrainian Cities says that after finalising the draft State Budget-2026, the government did not take into account a number of important proposals from communities. Therefore, the AUC continues to work with MPs on amendments.

Oleksandr Slobozhan, Executive Director of the organisation, told NikVesti.

According to him, the government sent a document to the Verkhovna Rada in which the share of personal income tax (PIT) for communities remained at 60%, while the AUC insisted on 64%.

«The Verkhovna Rada and the Budget Committee supported many of our proposals when considering the draft. Unfortunately, when finalising the budget for the second reading, the Cabinet of Ministers ignored the instructions to meet the needs of local self-government,» said Oleksandr Slobozhan.

It is noted that the reverse subsidy funds in the State Budget-2026 make up a significant share of the budgets of communities. The Association of Ukrainian Cities appealed to the Budget Committee of the Verkhovna Rada to ensure that these funds remain at the disposal of municipalities.

Losses of hromadas from the withdrawal of the reverse subsidy in the State Budget-2026. AUC infographic

According to Oleksandr Slobozhan, the funds of communities whose territories are temporarily occupied by Russia should be used to build housing for residents by municipalities — councils or military administrations.

«We make calculations and provide information to MPs and the Ministry of Finance. The MPs have already supported our proposal to preserve the remaining funds of the communities in the occupied territories and addressed Prime Minister Yuliia Svyrydenko with this proposal,» added Oleksandr Slobozhan.

When asked what steps the ACU will consider if the budget is adopted in its current version, he answered: «The Association of Ukrainian Cities is an association of communities that must continue to live with the provision of vital conditions. Therefore, we must now make every effort to preserve the funds of the communities. We are making every effort today to do just that».

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The Association of Ukrainian Cities is now doing everything possible to preserve communities' funds and meet their vital needs.

Earlier, in a comment to NikVesti, the advisor to the head of the Association of Ukrainian Cities clarified that during the work of the government group that prepared the main parameters of the draft budget-2026, it was not possible to agree on the 64% PIT rate.

See the article NikVesti: «Less Tax, Less City: What the PIT Cut Means for Mykolaiv» describes how the reduction in the tax share directly affects the city's budget, which is rebuilding schools, hospitals and critical infrastructure. The Mykolaiv City Council has already called on the government and parliament to retain 64% of PIT for communities.