The Association of Ukrainian Cities (AUC) insists on keeping 64% of the personal income tax (PIT) and reverse subsidies within local budgets.
This was reported by AUC.
The organization expressed its position in relation to the Cabinet of Ministers of Ukraine submitting the state budget draft for 2026 to the second reading, which, according to AUC representatives, ignored the instructions of the Verkhovna Rada and the needs of local self-government.
The parliament's decision from October 22, 2025, clearly stated that 64% of PIT should remain in the budgets of local communities. However, this provision was not reflected in the updated version of the state budget.
AUC emphasizes that the removal of reverse subsidies will negatively affect the financial stability of rural and settlement communities. Therefore, the association demands that these funds be retained at the local level.
Particular attention is drawn to the issue of educational subsidies. Local self-government representatives believe that all accumulated balances should remain in communities to cover their educational needs. Meanwhile, in the 2026 state budget draft, the government did not allocate 103.2 billion UAH of educational subsidies among communities, removed 150 million UAH for the "New Ukrainian School" program, and increased funding for the "Enhancing the Prestige of Work in Education" program from 53.8 to 59.8 billion UAH.
The draft also retains a provision that allows the state to manage the remaining funds of communities located in temporarily occupied territories. However, AUC insists that these funds should be used by municipalities - local councils or military administrations - specifically for housing construction for residents of such communities.
Before the second reading, the government allocated 13 billion UAH in additional subsidies for 992 communities affected by the war and maintained all other inter-budget transfers agreed upon with the Association of Ukrainian Cities in the first reading.
According to the updated document, 982 communities will receive a basic subsidy of 23.3 billion UAH in 2026. 203 communities must pay reverse subsidies totaling 15.5 billion UAH.
AUC emphasizes that balanced financing of local self-government is key to the development of communities and the country's recovery in wartime conditions.
Recall that on October 22, 2025, the Verkhovna Rada of Ukraine approved the draft Law of Ukraine "On the State Budget of Ukraine for 2026" in the first reading, registry No. 14000, which ordered the Government of Ukraine to consider including 64% of PIT in the revenues of local budgets, as proposed by the Association of Ukrainian Cities.