Rada increases 2025 State Budget by UAH 400 bln for defense, deficit up UAH 185 billion
The Verkhovna Rada, Ukraine's Parliament, on Thursday approved an increase in Ukraine's 2025 state budget expenditures by UAH 400.5 billion, or 10.2%, raising the total to UAH 4.329 trillion for defense needs. Bill No. 13573 was supported both in the first reading and as a whole by 332 MPs, according to an Interfax-Ukraine correspondent.
"The proposal includes an increase of UAH 412.3 billion in defense sector spending. Of that amount, UAH 115 billion is allocated for service member pay across all branches of the Defense Forces, and UAH 216 billion for procurement and production of weapons, military equipment, and drones. The remainder is intended for other military needs," Budget Committee Chair Roksolana Pidlasa wrote on Facebook Thursday morning.
According to bill No. 13573, registered on Thursday by parliament leaders and faction heads, state budget revenues will increase by UAH 147.5 billion, or 6.3%, to UAH 2.475 trillion, while the deficit will expand by UAH 250 billion, or 15.2%, reaching UAH 1.891 trillion.
Within the general fund, expenditures will rise by UAH 390.4 billion, or 10.9%, to UAH 3.982 trillion. Revenues will grow by UAH 137.4 billion, or 6.4%, to UAH 2.271 trillion, and the deficit will widen by UAH 250 billion, or 17.1%, reaching UAH 1.709 trillion.
The maximum amount of state debt has been increased by UAH 184.9 billion in amendments to the 2025 State Budget - to UAH 8 trillion 395.35 billion.
According to Pidlasa, the text of the bill also includes a new distribution of personal income tax (PIT) from August 1: 60% - goes to the Ministry of Defense for the purchase of drones, weapons, military equipment (this is an additional UAH 22.4 billion for the Ministry of Defense, already included in the total increase), 30% - to the State Special Communications Service for drones and 10% - for the needs of brigades.
Pidlasa said the increase in expenditures will be due to the same sources that were previously identified in the government bill - mainly an increase in deficit financing by UAH 184.9 billion through the placement of government bonds and the overfulfillment and expected overfulfillment of the budget's own revenues by UAH 147.5 billion. First of all, we are talking about personal income tax, income tax, excise duty on imported goods, as well as a larger-than-expected profit of the NBU and state-owned companies.
In addition, the expenses for repayment of domestic government bonds have been reduced by UAH 65.1 billion and the expenses for debt servicing due to exchange rate fluctuations and restructurings by UAH 11.2 billion, the head of the committee added.
Members of Parliament also voted for the immediate signing of the adopted law by the Speaker of the Parliament and its sending to the President for signature.
According to the text of the bill, it is planned to increase the volume of placement of domestic government loan bonds by UAH 184.9 billion - to UAH 764.1 billion and at the same time reduce the volume of payments on them by UAH 65.1 billion - to UAH 496.9 billion. Thus, net attraction through domestic government bonds in 2025 should be increased from UAH 17 billion to UAH 267 billion.
As reported, the 2025 State Budget was approved with revenues of UAH 2 trillion 327.1 billion, including UAH 2 trillion 133.3 billion of the general fund (excluding grants and international aid), and expenditures of UAH 3 trillion 929.1 billion, including UAH 3 trillion 591.6 billion of the general fund.