Money for Armament, Military Equipment, and Military Salaries: What the Changes to the State Budget Provide
As previously reported by the "Judicial and Legal Newspaper", on June 10, the Verkhovna Rada adopted in the second reading Draft Law No. 15224 on amendments to the Law of Ukraine "On the State Budget of Ukraine for 2026" regarding financial support for the security and defense sector.
The Ministry of Finance announced that the changes are related to the planned receipt of financial support from the European Union to Ukraine — 45 billion euros — and are primarily aimed at strengthening the country's defense capability.
Justification for the Changes
The European Parliament adopted a package of decisions to provide Ukraine with critically important financial support — the Ukraine Support Loan — totaling up to 90 billion euros for 2026–2027.
In 2026, the first half of this package — 45 billion euros (2 trillion 221 billion UAH at the average annual exchange rate) — will be received by the state budget of Ukraine, of which:
13.2 billion euros — budget support for social and humanitarian needs;
31.8 billion euros — support for the country's defense capability and security.
In order for these funds to be legislatively secured and used as intended, the Ministry of Finance prepared the corresponding amendments to the state budget, which were approved at a Government meeting.
The amendments provide that the revenues of the 2026 state budget will increase by 2 trillion 291 billion UAH (taking into account the draft amendments, revenues will amount to almost 5 trillion 196 billion UAH) thanks to three sources:
- EU financial support (enhanced cooperation mechanism) - 2 trillion 221 billion UAH;
- additional revenues within the implementation of Ukraine's Plan (implementation of the EU initiative "Ukraine Facility") - 47.7 billion UAH;
- increased revenues from personal income tax due to increased monetary allowance for the military - 22.6 billion UAH.
In addition, the main budget fund managers submitted proposals to reduce expenditures by 276.3 million UAH in accordance with the Cabinet of Ministers' protocol instruction.
How will the budget deficit change?
Thanks to a significant volume of external support in the form of grants, a reduction in the state budget deficit by 651.5 billion UAH is expected — from 18.5% to 12.1% of GDP (a decrease of 6.4%).
What Will the Funds Be Used For?
Security and Defense
The key change is a substantial increase in funding for the security and defense sector. The increase will amount to 1 trillion 560 billion UAH (the total resource for defense and security, taking into account the draft amendments, will amount to 4 trillion 367 billion UAH).
Additional funds are distributed across three main directions:
+174.3 billion UAH (total resource - 1 trillion 454 billion UAH) — monetary allowance for servicemen.
+1 trillion 371 billion UAH (total resource - 2 trillion 297 billion UAH) — armament and military equipment. Funds will be directed to the purchase and repair of military equipment, armaments, and ammunition.
+14.6 billion UAH (total resource - 213.6 billion UAH) — reserve for the security and defense sector.
The adopted draft law also reflects two important innovations:
- From July 1, 2026, the military tax will be credited to the special fund of the state budget and directed to the monetary allowance of servicemen of the Armed Forces of Ukraine.
- At the proposal of the Ministry of Defense, revenues from export duties on military goods and dual-use goods, after their introduction, will be directed to the purchase and modernization of armaments, development of the defense-industrial complex, implementation of new technologies, and monetary allowance for the military.
Comprehensive Regional Resilience Plans
A separate new budget program provides 40 billion UAH for the implementation of Comprehensive Regional Resilience Plans and individual cities.
Funds will be allocated for:
engineering and technical protection of critical infrastructure facilities;
distribution of thermal generation (block-modular boiler houses);
distribution of electric power generation (cogeneration units);
backup power sources for heat and water supply facilities.
Reserve Fund
An additional 37.2 billion UAH will be allocated to the Reserve Fund of the state budget. These funds are intended to finance unforeseen measures under martial law — in particular, the elimination of consequences of emergencies caused by armed aggression of the Russian Federation.
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