Ukrainian parliament approves UAH 412 billion budget increase for defense in 2025
Photo: Press service of the Verkhovna Rada

On Thursday, July 31, the Verkhovna Rada approved an increase of UAH 412 billion in 2025 state budget expenditures to finance defense needs. Draft Law No. 13573 was adopted both at the first reading and overall, receiving support from 332 members of Parliament.

"This is funding for our army," said Ruslan Stefanchuk, speaker of the Verkhovna Rada, during the session.

Earlier, on July 16, parliament had also supported another bill in the first reading, proposing to raise budget expenditures by UAH 457 billion.

In addition to the UAH 412 billion allocated for defense, that version of the bill included UAH 26 billion for the reserve fund and UAH 15.5 billion for other urgent needs.

However, Roksolana Pidlasa, chair of the Budget Committee, explained that the bill was revised during political consultations, narrowing its scope to military spending only.

The increase in expenditures will be financed through several sources:

  • increased issuance of domestic government bonds,
  • higher-than-expected budget revenues in the first seven months of the year, and
  • lower costs for repayment and servicing of domestic debt.

Following the adoption of the law, projected state budget revenues for 2025 rose to UAH 2.47 trillion (with UAH 2.27 trillion allocated to the general fund), while expenditures increased to UAH 4.33 trillion (UAH 3.98 trillion for the general fund). The maximum budget deficit is now set at UAH 1.7 trillion.

Changes to Military PIT Allocation

The distribution of personal income tax (PIT) paid by military personnel will also be revised starting August 1. Previously, in November 2023, the Rada had redirected these revenues from local to central budgets, distributing them as follows:

  • 45% – to the State Service for Special Communications and Information Protection, for drone procurement;
  • 45% – to the Ministry of Defense, for drones, weapons, and equipment;
  • 10% – directly to military units, in proportion to PIT paid.

Starting August 1, the new distribution will be:

  • 30% – to the State Service for Special Communications and Information Protection;
  • 60% – to the Ministry of Strategic Industries, for drones, arms, and military hardware;
  • 10% – to military units, as before.
  • The Ministry of Finance previously stated that the 2025 state budget is designed to ensure national stability, even in the event of continued full-scale military operations. Over UAH 2.2 trillion—equivalent to 26.3% of GDP—has been earmarked for defense-related needs.
  • Nonetheless, back in April, concerns arose that the expenditure side of the budget might fall short. As military aid from partners decreased, the Ministry of Defense began drawing on funds originally intended for use later in the year, primarily to procure ammunition and weaponry.
  • On June 25, the Cabinet of Ministers formally requested a revision of the 2025 budget to accommodate the increased defense spending.
Verkhovna Radalandslidebudget 2025