Ukraine's general budget underperforms by 49.5 billion hryvnias over nine months, parliament's budget chief says

Why it matters

Tax revenue is missing plan by close to 50 billion hryvnias, with two-thirds of the gap concentrated in August and September 2026. Nearly every major tax line — import VAT, domestic VAT, excise, and dividends — underperformed, pointing to a systemic rather than one-off deterioration. Defence absorbs 61.3% of general-fund spending, leaving the budget critically dependent on external financing and borrowing. Pidlasa links the shortfall to Russian strikes on business, framing the fiscal problem as a direct consequence of the war on the economy. The picture is complicated by the delayed 4.26 billion-dollar EU macro-financial tranche and the risk to a 29.5 billion-dollar international assistance package, while projected 2027 defence costs of 175 billion dollars add further pressure.

What happened

Roksolana Pidlasa, chair of the Verkhovna Rada's Committee on Budget Issues, published the nine-month budget results on Facebook. The general fund under-collected 49.5 billion hryvnias versus plan, of which 32 billion hryvnias fell in August and September alone. The biggest misses were import VAT (35.7 billion hryvnias, 6.8% of plan), domestic VAT (32.9 billion hryvnias, 11.4%), internal excise (19.1 billion hryvnias, 16.5%), and dividends and share of state-owned enterprise profits (10.8 billion hryvnias, 16%). Two lines beat plan: corporate income tax by 29 billion hryvnias (12%) and personal income tax plus military levy by 6.6 billion hryvnias (2.6%).

On the spending side, defence took 2 trillion hryvnias, or 61.3% of all general-fund outlays. Debt principal repayments absorbed 427.9 billion hryvnias, social protection and veteran support 342.6 billion, and debt servicing 275.2 billion. The medical guarantees programme and health screening cost 144 billion hryvnias, school teacher salaries 116.7 billion, and basic and additional local budget subsidies 48.5 billion. Domestic government bond placements brought in 350.6 billion hryvnias, and roughly 22 billion dollars of international assistance was used to cover general-fund expenditures.

Pidlasa named Russian strikes on Ukrainian business as the principal cause of the shortfall and warned the budget situation will remain critical until the second EU macro-financial assistance tranche of 4.26 billion dollars arrives. She also said the government plans to raise VAT by 1 percentage point to fund business insurance, and that on 28 September 2026 the cabinet approved a decision defining expenditure priorities.

Background

Prime Minister Serhii Koretsky announced a strict non-defence spending austerity regime on 1 September, and on 14 September warned that state finances were approaching a critical state and that delays with draft laws could jeopardise 29.5 billion dollars in international aid. On 4 September, Finance Minister Serhii Marchenko said the budget situation had not been this strained since the start of the full-scale invasion. On 24 August, President Zelenskyy said the army was short 27 billion dollars; five days later Defence Minister Yevhen Khmara confirmed the same figure and said the ministry had options to cover it. On 15 September, European Commissioners Valdis Dombrovskis and Maroš Kerat — actually let me correct the names — European Commissioners Valdis Dombrovskis and Marta Kos sent the Rada a letter listing the laws needed to unlock already-agreed EU financing, in response to Ukraine's request for an additional 27 billion dollars for defence. On 28 September the government approved a decision defining expenditure priorities. The Ministry of Defence forecasts 2027 defence spending of 175 billion dollars.