Ukrainian Parliament passes at first reading govt amendments to 2026 state budget to finance defense sector with 240 votes in favor

The Verkhovna Rada has approved at first reading an increase in 2026 state budget revenues by UAH 2.291 trillion and expenditures by UAH 1.640 trillion, primarily for security and defense purposes, due to the receipt this year of EUR 45 billion under the Ukraine Support Loan (USL) from the EU.

As reported by an Interfax-Ukraine correspondent, a total of 240 lawmakers voted in favor of the corresponding government bill on amendments to the 2026 state budget regarding financial support for the security and defense sector (No. 15224), exceeding the minimum required 226 votes.

Finance Minister Serhiy Marchenko, while presenting the bill, said it would make it possible to reduce the state budget deficit by UAH 651.5 billion, from 18.5% of projected GDP to 12.1% of GDP.

The newly proposed level of 2026 state budget revenues is UAH 5.196 trillion, including UAH 3.379 trillion for the general fund, while expenditures are proposed at UAH 6.407 trillion.

According to the Finance Ministry’s explanation, in addition to UAH 2.221 trillion from the USL (EUR 45 billion at the average annual exchange rate), the amendments also provide for an additional UAH 47.7 billion in receipts under the Ukraine Plan within the Ukraine Facility program and another UAH 22.6 billion in personal income tax revenues due to increased military pay.

As for expenditures, according to Marchenko, the largest increase will go to the security and defense sector – up UAH 1.560 trillion, to UAH 4.367 trillion. Of this amount, military personnel pay will increase by UAH 174.3 billion, to UAH 1.454 trillion, while expenditures on the procurement and repair of military equipment, weapons, and ammunition will rise by UAH 1.371 trillion, to UAH 2.297 trillion.

In addition, the reserve for the security and defense sector will increase by UAH 14.6 billion and reach UAH 213.6 billion.

At the proposal of the Defense Ministry, proceeds from export duties on military and dual-use goods, after the duty is introduced, will be directed toward the procurement and modernization of weapons, the development of the defense-industrial complex, the implementation of new technologies, and military pay.

Regarding other expenditures, a new budget program worth UAH 40 billion is proposed for the implementation of Comprehensive Resilience Plans for regions and individual cities, along with an additional UAH 40 billion for the state budget Reserve Fund, which currently stands at UAH 49.42 billion and, as of the end of the first quarter, had already been utilized by 96.1%.

The Finance Ministry clarified that the first of the aforementioned UAH 40 billion will be allocated for engineering and technical protection of critical infrastructure facilities, decentralized heat generation (block-modular boiler houses) and electricity generation (cogeneration units), as well as backup power sources for heating and water supply facilities.

First Deputy Chairman of the parliamentary committee on finance, tax, and customs policy Yaroslav Zhelezniak (Holos faction), who is the author of an alternative draft law, stated during the discussion that the UAH 174.3 billion in additional military pay proposed by the government is insufficient, and that, according to the Accounting Chamber, "at least the 2025 level of UAH 365 billion" is needed.

"This budget allocates zero hryvnias for increasing military salaries. Under the pompous slogan of increasing the war budget, this law takes UAH 40 billion away from Defense Ministry military procurement programs and transfers it to the Reserve Fund," the opposition lawmaker claimed.

He also criticized the possibility of continuing to direct Reserve Fund resources toward such programs as National Cashback or fuel cashback.

These demands were also supported by Petro Poroshenko, leader of the opposition European Solidarity party and faction, which submitted its own alternative bill.

"In our bill keep your hands off the UAH 40 billion for weapons. Second, Reserve Fund resources exclusively and solely for eliminating the consequences of disasters and Russian strikes," he said from the parliamentary rostrum.

Ukraine’s 2026 state budget was adopted with revenues (excluding grants) of UAH 2.90 trillion and expenditures of UAH 4.77 trillion, including UAH 2.61 trillion and UAH 4.38 trillion, respectively, for the general fund.

According to Finance Ministry data, the general fund received UAH 1.04 trillion in January-April of this year, while expenditures amounted to UAH 1.35 trillion. This represents increases of 21.5% and 13.9%, respectively, compared to the same period in 2025.