The Cabinet of Ministers transferred 9.6 billion hryvnias from the military income tax to the Defense Forces

After the decision to redirect the military personal income tax from local budgets to the state defense-industrial complex received 51 billion hryvnias for development, 43 billion went to the production of drones, and 9.6 billion to the Defense Forces for the purchase of weapons, equipment and means of protection.

Prime Minister Denys Shmyhal said this at a government meeting.

"For this year, we received an additional resource — plus 51 billion hryvnias for the development of the defense industry and more than 43 billion for the production of drones. At the same time, it was decided that 10% of the military income tax will be sent directly to the military units. Therefore, today we are handing over 9.6 billion hryvnias of military personal income tax to the Defense Forces for the purchase of weapons, equipment, ammunition, and means of protection," he emphasized.

From January 1 to December 31 of the year in which martial law is terminated or abolished, " military personal income tax " will be distributed as follows:

45% — State Special Communications for drones (forecast 43+ billion hryvnias);

45% — to the Ministry of Strategic Industries of Ukraine for the production of ammunition and weapons (43+ billion);

10% — to military units on the ground (about 10 billion).

What is interesting about the "military personal income tax"

In the first seven months of 2022, the maintenance of military personnel was the largest item of expenditure — 520 billion hryvnias, or a third of all state expenditures since the beginning of the year. Since the military also pays taxes on the income received, in particular personal income tax, the corresponding charges have increased very sharply and in a large amount.

Currently, income from personal income tax is distributed between state and local budgets: 64% goes to community budgets, 15% to regional budgets, and the rest to the state budget.

During the war, the "military personal income tax" became an important source of filling local budgets — the incomes of communities increased eightfold. In 2023, the projected amount of revenues from the "military personal income tax" is expected to be at the level of 96 billion hryvnias. For comparison: in 2021, it was at the level of 12 billion hryvnias.

"Super incomes" were received by those communities on the territory of which military units or training centers are registered. That is, different communities can have radically different incomes, and not all of them "rationally" arrange a large income.