Who is seeking financial support from Kyiv?
In a significant turn of events, the Verkhovna Rada of Ukraine voted to secure payments for military personnel in 2025, avoiding a proposed withdrawal of funds from Kyiv's budget. This decision was a crucial step towards maintaining financial stability and ensuring timely payments to military personnel.
The initial proposal, part of draft law No.13439-3, aimed to remove around 8 billion hryvnias from Kyiv's budget, intended for Ukrzaliznytsia or the general fund, not the military. However, this move raised concerns due to its potential violation of legal and mathematical equity principles regarding budget allocation.
Facing opposition and legal concerns, the proposed "robbery" of Kyiv’s funds was removed from the budget draft. A new draft law (No. 13573) replaced the original, focusing solely on increasing defense expenditures without touching the Kyiv budget. This adjustment ensured funds for military needs—including monetary allowances for servicemen, weapons, and equipment purchases—were prioritized and timely.
Removing the provision to take funds from Kyiv ensured compliance with Ukrainian budget laws and avoided legal conflicts. The approved law increased defense spending significantly (by UAH 412.4 billion), thus addressing urgent military financing needs linked to the ongoing war. This change prevented delays in military personnel payments, which would have started accruing arrears from August 15 if the budget was not amended accordingly.
For 2025, the Kyiv budget plans to receive 10% of the profit tax in the amount of 14.5 billion hryvnia. This revenue is crucial for the city's financial planning, which includes allocations for social protection, education, and healthcare. Notably, social protection in Kyiv is allocated 9.9 billion hryvnias in 2025 for various programs, including the poor, children with disabilities, veterans, families of the fallen and missing, those in captivity, and Kyiv residents in difficult life situations. In addition, Kyiv planned to allocate 2.4 billion hryvnia for teacher bonuses and 6.5 billion hryvnia for medical care for Kyiv residents.
The Verkhovna Rada's decision on July 31, 2025, to leave the money with Kyiv residents, vote for draft law No.13573, and allocate 412.3 billion hryvnias for military funding and supplies, was the only correct decision. This move prevented a potential deficit in the Kyiv budget, which was estimated to be approximately 11.8 billion hryvnia for 2025.
It is worth noting that Kyiv has accepted 425,000 officially registered IDPs who receive social payments from the city budget along with other Kyiv residents. The city's budget also plans to allocate 9.9 billion hryvnia for veteran subdivisions, plus 1.5 billion hryvnia for defensive structures.
The authors of the bill are Yulia Gryshyna and Oleg Bondarenko, both from the "Servant of the People" faction. The bill was voted for in first reading and as a whole on the day of its registration.
In Europe and the United States, it is a common practice for capitals to receive a larger share of the Single Social Contribution or similar funds, reflecting their unique responsibilities and needs. For instance, Brussels receives an annual special grant from the federal government, amounting to around 15% of its budget, while Berlin's budget receives parts of VAT and profit tax, which is not the case for other municipalities in Germany.
This incident underscores the importance of maintaining budgetary integrity and adhering to legal principles in budget allocation. The Verkhovna Rada's decision to protect Kyiv's budget was a significant step towards ensuring financial stability and meeting the needs of Kyiv's residents.
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