The draft amendments to the state budget of Ukraine for 2026 provides for a significant increase in funding for the defense and security sector. Total state budget revenues are expected to rise by 2,291.3 billion UAH, reaching 5,195.9 billion UAH, while expenditures on defense and security will increase by 1.56 trillion UAH.
This is reported by Finway
Main directions for the distribution of defense expenditures
The total amount of funding for the defense sector, according to the draft amendments, will be 4.367 trillion UAH. The main funds will be allocated in the following directions:
- Monetary support for military personnel: an additional 174.3 billion UAH, total resource — 1.454 trillion UAH.
- Weapons and military equipment: an additional 1.371 trillion UAH, total resource — 2.297 trillion UAH. Funds will be used for the purchase and repair of military equipment, weapons, and ammunition.
- Reserve for the security and defense sector: an additional 14.6 billion UAH, total resource — 213.6 billion UAH.
Funding increases and innovations in the budget project
Additional budget revenues will be provided by the following sources:
- financial support from the EU through the enhanced cooperation mechanism — 2,221 billion UAH;
- additional revenues within the implementation of Ukraine’s Plan, thanks to the EU initiative “Ukraine Facility” — 47.7 billion UAH;
- increased revenues from personal income tax due to the increase in monetary support for military personnel — 22.6 billion UAH.
At the same time, the main budget fund managers submitted proposals for a reduction in expenditures by 276.3 million UAH in accordance with the protocol directive of the Cabinet of Ministers.
Thanks to significant external financial support in the form of grants, the state budget deficit in 2026 will decrease by 651.5 billion UAH: from 18.5% to 12.1% of GDP (a reduction of 6.4%).
“The key change is a substantial increase in funding for the security and defense sector. The increase will amount to 1.56 trillion UAH (the total resource for defense and security, taking into account the draft amendments, will be 4.367 trillion UAH)”.
The draft law includes two important innovations. The first — from July 1, 2026, the military tax will be credited to a special fund of the state budget for the monetary support of the Armed Forces of Ukraine. The second — at the suggestion of the Ministry of Defense, revenues from export duties on military and dual-use goods, after its implementation, will be directed to the purchase and modernization of weapons, the development of the defense industry, the implementation of new technologies, and the increase of monetary support for military personnel.
The draft amendments to the expenditure part of the state budget provides, in particular, additional funds for the defense and security sectors:
- +3.15 billion UAH for the development of the defense industry (from “military personal income tax”);
- +2.13 billion UAH for State Special Transport under the Ministry of Defense;
- +9.91 billion UAH for the National Guard (monetary support and weapons);
- +6.79 billion UAH for the State Border Guard Service;
- +4.8 billion UAH for State Special Communications (for drones);
- +2.47 billion UAH for the Security Service of Ukraine (mostly monetary support);
- +1.83 billion UAH for the Main Intelligence Directorate of the Ministry of Defense (monetary support and weapons);
- +7.8 million UAH for the Foreign Intelligence Service.
Overall, the government plans to allocate an additional 1.56 trillion UAH to ensure the security and defense sector in 2026. Of this amount, 174.3 billion UAH will go to monetary support for military personnel, 1.37 trillion UAH — for the development of weapons and military equipment, and 14.6 billion UAH — to the reserve of the security and defense sector.