Mykolaiv's budget will lose ₴740 million this year due to the withdrawal of the military personal income tax

Due to the removal of personal income tax (PIT), which is paid by military personnel, the budget of Mykolaiv this year will lack about 740 million hryvnias.

NikVesti reports the director of the finance department, Vira Sviatelyk, told about this on Tuesday, November 21, during the planning and budget commission of the Mykolaiv City Council.

It will be recalled that on November 8, the Verkhovna Rada supported in the second reading the draft law, which provides for the transfer of the tax on the income of military personnel from local communities to the state budget.

— In 2023, personal income tax will be collected from October 1 to December 31, according to the planned indicators, we will lose about 740 million hryvnias. In addition, personal income tax will be collected in the future, that is, from January 1, 2024 to December 31 of the year in which martial law ends. Next year, we will lose approximately 2.7 billion hryvnias, said Vera Svyatelyk.

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As you know, within the framework of the law «On the state budget for 2024», the Cabinet of Ministers plans to direct all revenues from the personal income tax of military personnel, 64% of which currently remain in local budgets, to the state budget. The Association of Cities of Ukraine believes that these funds will most likely be dissolved in the state budget, as well as 36% of the current personal income tax, which is administered by the Ministry of Finance. We are talking about 25.8 billion hryvnias this year and 93.7 billion hryvnias next year, Prime Minister Denys Shmyhal clarified the day before.

The budget of Mykolaiv will thus lose 2.7 billion hryvnias, the mayor of the city Oleksandr Sienkevych said.

The Verkhovna Rada of Ukraine can allocate over 517 million hryvnias to the communities of the Mykolaiv region to compensate for the loss of personal income tax from military income.

On October 6, it was reported that the Budget Committee of the Verkhovna Rada reviewed the decision on the draft law on personal income tax from the military and made amendments: from October 1 to December 31, 2023, the «military» personal income tax is directed to the state budget in the proportion of 50% to 50%. One part of 13 billion hryvnias will go to the State Service for Special Communications and Information Protection of Ukraine for drones, and the second part, also 13 billion hryvnias, will be directed to the Ministry of Defense for the purchase of artillery systems.

People's deputies also commented on the situation with the possible loss of the military personal income tax. In particular, People's Deputy from the Servant of the People party Artem Chornomorov criticized the Ministry of Finance and the Budget Committee of the Verkhovna Rada of Ukraine over the decision to withdraw the personal income tax paid by the military from the budget of Mykolaiv.

During the session of the Mykolaiv City Council, he stated that he will not support the 2024 state budget unless it is amended to leave the personal income tax paid by military personnel in front-line communities.

People's Deputy of Ukraine Maksym Dyrdin announced that he will not make any amendments to the state budget-2024 for the Mykolaiv region. Unlike his colleague, People's Deputy Oleksandr Pasichnyi said that he is working on amendments to the state budget for 2024 to balance the revenues of the city of Mykolaiv with subsidies after the loss of personal income tax (PIT) paid by the military.

People's Deputy of Ukraine Ihor Negulevskyi said that he supports the removal of the military personal income tax (PIT) from the budgets of communities, because now the priority is the victory of Ukraine, so all other issues, including the everyday needs of communities, should be put on the back burner.