Budget Declaration for 2025-2027 approved by Government contains unacceptable provisions on revenues of territorial communities - AUC
The Association of Ukrainian Cities opposes the reduction of local community revenues envisaged by the Budget Declaration for 2025-2027, approved by the Government on June 28.
This is reported by Censor.NET with reference to the AUC website.
In order to preserve the ability to fulfill the powers of local governments, provide necessary services to residents and assist the Joint Forces of the Armed Forces of Ukraine, the Association of Ukrainian Cities demands the following provisions to be removed from the text of the Budget Declaration:
- - a 4% reduction in the share of personal income tax credited to local government budgets. Implementation of this rule in 2025 will result in UAH 11.4 billion in losses to local budgets and the termination of heat and water supply to residents of most Ukrainian settlements. Moreover, the European Commission's Report on fiscal decentralization states that communities should have 64% of personal income tax as part of fiscal decentralization, so a reduction in this figure would negatively affect the course of negotiations on Ukraine's accession to the EU;
- - applying a reverse allowance starting in 2025. It is proposed to withdraw UAH 16.6 billion from 240 territorial communities (78% of which are villages, towns, and small cities), which are currently used to help military units and finance local programs in education, healthcare, social assistance, and protection;
- - withdrawal of the personal income tax on military salaries from the revenues of territorial communities' budgets in 2025-2027. It is proposed to reduce community funding for the needs of military units by at least UAH 90 billion annually, which contradicts the draft law 9559-d approved by the Parliament to empower communities to support the security and defense sector and create fortifications.
According to the AUC, the detailed indicators for 2025-2027 for the education subvention, basic and reverse allowances, and other intergovernmental transfers indicate the end of the period of budget decentralization in Ukraine.
