The Government has prepared the draft State Budget 2026 for the second reading: main changes
6 November 00:59
The Cabinet of Ministers has approved the draft state budget of Ukraine for 2026 for the second reading in the Verkhovna Rada. This was announced by Prime Minister Yulia Svyrydenko, "Komersant Ukrainian" reports
The main decisions in the document were made taking into account the key national priorities of security, defense, and social sustainability.
As the government emphasized, all of the state’s own revenues are directed to the Defense Forces, and the rest of the funding is based on the search for additional internal and external resources. At the same time, the government is committed to supporting the social sphere, especially education and healthcare.
“It remains important to ensure decent wages in the social sector. Therefore, next year, salaries for doctors and teachers will be increased,” the government said.
What has changed in the draft budget before the second reading
Revenues are growing
The total revenues of the 2026 budget have been increased by UAH 27.8 billion. The main source of revenue is an increase in the income tax rate for banks from 25% to 50%.
Expenditures are growing
State budget expenditures will increase by UAH 33.6 billion. Of this amount:
- uAH 18.9 billion will be allocated to the reserve fund,
- uAH 6.6 billion will be allocated to raise salaries in the education sector, not only for school teachers but also for university and vocational college professors. The salaries of these categories will be increased by 50% over the course of the year in stages.
Key figures of the budget 2026
Compared to the first reading, state budget revenues have been increased by UAH 27.8 billion, expenditures by UAH 33.6 billion, and the deficit limit by UAH 5.8 billion, the Ministry of Economy said.
Based on the results of the revision, state budget revenues (excluding intergovernmental transfers) are set at UAH 2 trillion 854.3 billion, expenditures at UAH 4 trillion 837.4 billion, and the deficit at UAH 1 trillion 900 billion, which is 18.4% of GDP.
The state budget revenues are expected to increase due to changes in the taxation system and revised revenue forecasts. In particular, the increase in the corporate income tax rate for banking institutions from 25% to 50% (draft law #14097) will bring in an additional UAH 30 billion. A part of this tax, which was previously credited to local budgets, has been transferred to a special fund of the state budget – another UAH 4.3 billion.
Additional revenues are also expected from the increase in dividends of PJSC Ukrainian Financial Housing Company – UAH 1.3 billion. At the same time, there was a technical adjustment to the World Bank’s grant revenues under the RELINC project: a grant of UAH 5 billion was replaced by a concessional loan guaranteed by the European Commission under the Ukraine Facility.
The increase in expenditures is due to the clarification and strengthening of the priority areas of financing. The additional resources will be allocated, in particular, to
- reserve Fund: uAH 18.9 billion (UAH 54.5 billion in total) to respond quickly to wartime challenges;
- salaries of teachers: uAH 6.6 billion (UAH 190.5 billion in total) – a gradual increase (over the course of a year) of the level of remuneration not only for school teachers, but also for pedagogical and scientific and pedagogical staff of higher education institutions and state-owned professional higher education institutions;
- public investment projects: uAH 4.3 billion (UAH 107.2 billion in total) – includes the continuation of the passenger railroad car renewal program;
- state housing policy: uAH 1.3 billion (total of UAH 46.5 billion) – through PJSC “Ukrainian Financial Housing Company”.
It also provides for the return to the state budget of UAH 1.4 billion previously contributed to the authorized capital of the State Enterprise for Financing Infrastructure Projects and not used for its intended purpose.
Half of the “bank tax” that was supposed to be credited to local budgets (UAH 4.3 billion) is to be used to purchase passenger railcars for Ukrzaliznytsia, said Roksolana Pidlasa, chair of the Rada’s Budget Committee.
In addition, UAH 1.4 billion will be allocated for the purchase of railcars, which will be returned to the budget by the State Enterprise for Financing Infrastructure Projects. In total, UAH 5.7 billion is budgeted for railcars for UZ.
The text of the draft law states that:
- at least UAH 1 billion should be spent on humanitarian land demining,
- ukrfinzhytl’s dividends (UAH 1.27 billion) will be used for the preferential mortgage program (similarly until 2025),
- The Ministry of Finance is to be authorized by the Cabinet of Ministers to exchange domestic government bonds owned by the NBU for new domestic government bonds on the terms agreed with the NBU,
- to transfer 50% of the personal income tax paid by Defense City residents to the budget of the community where the company is relocated and to use this money to build infrastructure, support relocation or protect production.
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In addition, the reverse and subsidies for local budgets are recalculated according to the population according to the State Statistics Service and the IDP register of the Ministry of Social Policy (instead of the Migration Service).
As proposed by MPs, the government must submit to the Parliament a draft law by July 1, 2026, to establish unified approaches to retirement age and indexation of pensions on general terms for those who are entitled to pensions under special laws.
The Cabinet of Ministers has been instructed to consider raising teachers’ salaries by 30% starting September 1 (in addition to the 30% increase already planned for January 1).
Separately, Pidlasa noted that the distribution of personal income tax remained unchanged from the first reading – 60% of personal income tax is proposed to be transferred to local budgets.
Revenues from the “OLX tax” and the “tax on sweet soda” also remained included in the budget revenues.
It is proposed to reduce expenditures on the State Border Guard Service by UAH 8.24 billion (redistributed mainly in favor of the National Guard – UAH 5.85 billion and the National Police – UAH 2.29 billion).
An additional UAH 1 billion is planned to be allocated for partial compensation of property losses of businesses and insurance premiums against war risks and shelter in kindergartens.
In addition:
- uAH 528 million for public investment projects (PIPs) in the healthcare sector (preliminary – for the reconstruction of the Kharkiv Regional Children’s Hospital, but this is still to be approved by the Strategic Investment Council). In general, all medical PIPs are transferred to the Ministry of Health,
- uAH 500 million to support relocated higher technical education institutions from the frontline areas,
- uAH 500 million to local budgets for housing for evacuees and IDPs.
When the Parliament will consider the budget for 2026
The draft State Budget of Ukraine for 2026 was approved by the Government in September and submitted to the Verkhovna Rada. The Parliament supported the document in the first reading as a basis. After receiving suggestions from MPs, the Government finalized the draft budget taking into account the recommendations of the Budget Committee.
The next stage is the second reading, which is scheduled to take place by November 20, 2025.
The head of the Verkhovna Rada Budget Committee clarified that the Rada plans to consider the 2026 budget in the second reading on November 18.
Last year, the Verkhovna Rada voted on the 2025 budget in the first reading on October 31, and adopted it in its entirety on November 19.
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