The Verkhovna Rada approved a measure that will allow 218 communities to retain 19.4 billion UAH in their local budgets in 2027; the Cabinet of Ministers must take this into account when preparing the State Budget draft for the second reading.
Who benefits and how they voted
Amendment No. 872, authored by member of parliament Pavlo Bakunets, was supported by almost 70 MPs from various regions and ultimately received the backing of 284 deputies during the vote on bill No. 16000 on the State Budget 2027. Of the 218 communities affected by the planned withdrawal of funds, 152 are rural and settlement communities.
In the original draft of the State Budget these 19.4 billion UAH were to be withdrawn and sent to the state budget, but the Verkhovna Rada Committee on Budget Issues partially took the proposal into account and instructed the government to revise the mechanism so that the funds remain in local budgets. During the debate one MP proposed rejecting the amendment itself, but that proposal did not gain support.
Implementation conditions and the government’s role
The parliamentary decision stipulates that the Cabinet of Ministers must balance the budget indicators and take into account the retention of the reverse subsidy in local budgets when preparing the document for the second reading. To implement the proposal, the government must envisage suspending, in this part, the operation of articles 99 and 100 of the Budget Code of Ukraine, which regulate the mechanism of the reverse subsidy and its distribution.
The final enshrinement of 19.4 billion UAH in community budgets will depend on how the government incorporates the parliament-backed amendment in the revised State Budget 2027 draft. The Committee instructed the government to refine the mechanism, but the date the changes take effect is effectively tied to the adoption of the final budget text in the second reading.
Key figures of the State Budget 2027 draft
MP Roksolana Pidlas, from “Servant of the People” and deputy chair of the Committee on Economic Development, reported the main figures of the budget draft in September. The draft envisages more than 8 trillion UAH of expenditures and is based on about 3.7 trillion UAH of own resources and 4.3 trillion UAH from international partners.
The largest portion of funds in the draft—4.89 trillion UAH—is planned for security and defence. Support for communities and the energy sector is allocated 133.6 billion UAH, of which 30.4 billion UAH is an additional grant to communities affected by the war. Part of the projected revenues, more than 131 billion UAH, depends on the parliament approving tax changes, in particular an increase in value-added tax (VAT) and excise duties on fuel.
