Why the state cannot raise military salaries: reasons, risks and figures
8 October 20:44
The discussion of raising salaries for military personnel has once again come into focus following a statement by Bohdan Kitsak, a member of the Servant of the People party. On the air of the program Ranok.LIVE, he emphasized that even a partial increase in payments is currently an extremely difficult task due to the lack of budgetary resources.
Komersant investigated whether the state budget does not have enough money even to increase the salaries of the Armed Forces by UAH 10 thousand and where such amounts can be obtained if the budget cannot withstand the load.
According to Kitsak, raising the military’s salaries by 10 thousand hryvnias a month would require an additional 100 billion hryvnias a year. On the scale of the military budget, this is an amount that is difficult to finance without revising state priorities or attracting external assistance.
We must understand that we are not talking about a few billion, but about a hundred. Even a minimal increase for about 800 thousand military personnel is a huge resource that simply does not exist today,” explained Kitsak.
Where can we get the funds to increase payments to the military?
The politician noted that even a radical reduction in inefficient government programs or administrative costs will not have the desired effect. Even according to the most optimistic estimates, only UAH 20-30 billion can be accumulated in this way.
This amount includes potential cuts:
- funding for the telethon, which remains one of the most controversial areas of budget spending;
- limiting the salaries of civil servants and heads of state-owned enterprises;
- curtailment of programs that are inefficient or have no impact on defense capabilities.
Even if all this is cut to a minimum, there will only be enough money for a partial increase. This will not solve the problem systematically,” noted Kitsak.
Shadow economy and fiscal reserves that do not exist
The parliamentarian also mentioned possible sources of budget revenues that the authorities regularly declare, such as the de-shadowing of the economy, customs and tax reform. However, as the parliamentarian emphasized, these reforms have existed for many years only in the form of plans and strategies.
According to experts, the size of the shadow sector in Ukraine is estimated at 25-30% of GDP, but the actual mechanisms for attracting these funds to the budget remain ineffective. Customs and tax reforms are often hampered by bureaucratic resistance, changes in leadership, and the lack of stable rules of the game.
There has been a lot of talk about customs, taxation, and the shadow economy, but there is no effect,” the MP stated.
State budget and competitive salaries for the Armed Forces: the real scale of the problem
In 2025, the state budget of Ukraine provides more than UAH 1.7 trillion for the security and defense sector. The Ministry of Defense receives almost UAH 1.3 trillion of this amount. An additional UAH 100 billion would mean an increase in defense spending by almost 8%, which is impossible without revising other budget items or new borrowing.
At the same time, even without taking into account the increase in salaries, Ukraine already faces a budget deficit of more than $40 billion, which is covered by international aid, loans, and grants. Domestic tax revenues are not even enough to finance current social and military needs.
The government is increasing defense spending: where will the money come from, how has the budget been reshaped, and what are the risks for Ukraine?
The Cabinet of Ministers of Ukraine proposes to increase the expenditure side of the 2025 budget by another UAH 324.8 billion, allocating these funds to defense. This is not a gesture of generosity, but rather a forced response to military challenges. The peculiarity is that part of the money is planned to be “intercepted” from the resources planned for 2026 under the ERA Loans initiative (the European Union and the G7 countries).
Prime Minister Yulia Svyrydenko explained that the decision was dictated by the dynamics of the frontline and the constantly changing conditions of the fighting. “Russia is not going to stop, it is changing its tactics at the front and only intensifying attacks on our energy infrastructure in the rear.
This is the second increase in defense spending in 2025: the previous one, by UAH 412.4 billion, took place in late July. Such interim budget “revisions” are becoming almost traditional in a full-scale war.
Out of the total amount , UAH 310.5 billion will go to the general budget fund, which finances salaries, supplies, procurement, and other basic expenses.
The distribution looks like this:
The Ministry of Defense – over UAH 301 billion, of which:
- about 211 billion – directly for the needs of the Armed Forces,
- 84.5 billion – for the purchase, repair and modernization of equipment,
- 5.5 billion for the reform of the defense industry.
National Guard – UAH 8.2 billion;
TheSecurity Service of Ukraine – UAH 1.3 billion;
State Special Transport Service – almost UAH 1 billion.
The Cabinet of Ministers proposes to allocate another UAH 14.3 billion to the special fund, in particular:
- The Ministry of Defense – UAH 9.7 billion (development of the defense industry, repair of equipment, purchase of weapons);
- The State Service for Communications and Information Protection – UAH 4.3 billion for the purchase of drones;
- State Border Guard Service – UAH 82.9 million;
- The Defence Intelligence of Ukraine and the Foreign Intelligence Service – UAH 28.8 million and UAH 7.9 million respectively.
This division between the general and special funds will allow the Cabinet of Ministers to be flexible, but at the same time requires strict control to ensure that the funds are used for their intended purpose.
The main source of financing is ERA Loans. Out of the budget increase, UAH 294.3 billion is planned to be financed by ERA funds. This is a key element that changes the logic of financing: the resources planned for 2026 are transferred to the current year.
During the previous spending increase in July, the government also relied on the ERA, but it was still necessary to obtain permission from the European Commission to use part of the funds ahead of schedule.
In addition, the Government expects about UAH 20 billion from the growth of personal income tax and military fee revenues due to the increase in military salaries in November and December.
The Government proposes to save another UAH 10.4 billion at the expense of non-military items:
- uAH 6.5 billion – reduction of expenditures on repayment of domestic government bonds and interest payments due to the strengthening of the hryvnia and a moratorium on payments on Eurobonds until 2027;
- uAH 3 billion – savings on loans issued under state guarantees;
- up to UAH 1 billion in cuts in non-priority spending in government agencies.
Thus, the issue of increasing payments to the military remains politically sensitive. On the one hand, Ukrainian military personnel work in extremely difficult conditions and need decent material support. On the other hand, the economic situation in the country remains extremely tense, and international partners expect the government to pursue a balanced budget policy.
According to MP Bohdan Kitsak, in the short term, the government will focus on stabilizing payments rather than increasing them. The priority remains the timely payment of salaries, bonuses and compensations for the military on the front line.
The government continues to look for new mechanisms to fill the budget, including through optimization of public procurement, privatization, and investment programs. However, even these measures, according to the Ministry of Finance, will not yield results until 2026.
Thus, we should not expect a massive increase in military salaries in 2025. The situation will remain stable only if international support and restrained budget planning are maintained.
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Given the current financial realities, even a minimal increase in military pay remains economically unrealistic. Ukraine is facing a choice between social expectations and budgetary capacity, and so far the latter is prevailing.
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