Rage of the communities. How much money did communities spend to help the front without a military personal income tax? (Updated)
The problem of helping communities at the front has remained extremely relevant throughout the three years of the full-scale invasion. Unfortunately, this topic has become an occasion not only for serious discussion but also for manipulation by the central government.
The Center for Innovations Development, together with the Holka civic initiative, investigated how local authorities financed the needs of the frontline in the absence of “military” and “security” personal income tax, which communities did not receive from the state budget at the end of 2023 and in 2024, as well as how communities provided for reconstruction after enemy attacks.
In total, over the past year, the 262 surveyed communities allocated approximately 25 billion UAH from local budgets to meet community and defense needs. Of this amount, around 9 billion UAH was spent on local needs and territorial defense (in accordance with Territorial Defense Support Programs and other legal provisions — according to the methodology), while 15 billion UAH was directed toward the defense forces overall. Therefore, the total figure nationwide is significantly higher. (Updated).
Over the past year, 262 surveyed communities allocated about UAH 25 billion from local budgets for community needs and defense forces. Of this amount, about 9 billion was allocated for their own needs and community defense and 15 billion for the defense forces in general. Therefore, the total amount for Ukraine is much higher.
The surveyed communities spent at least 0.01% of their annual budgets on defense forces and, at most, 24.3%. The study deliberately does not provide figures for individual communities for security reasons, and the information is analyzed by region. It is important to note that the number of communities that answered the questions and provided their data varies by region. Therefore, in this text, we are not comparing who spent more, but rather informing that communities continue to help the frontline even after the state took away the military personal income tax and allegedly took over this function completely.
The “military” and “security” personal income tax is a tax on the income of military personnel, emergency responders, law enforcement officers, and security personnel (police officers, prosecutors, special services, and rank-and-file and senior officers) that they paid to the local budget in previous years.
It is important to understand that before 2022, when the “military” and “security” personal income tax was paid to the budget of the community where the military unit was legally registered, it was not as significant as after the full-scale invasion.
The local authorities did not agree with the Parliament’s decision to remove the “military” and “security” personal income tax. This was stated by Deputy Mayor of Dnipro Volodymyr Miller:
When the number of military personnel increased significantly three years ago, the amount of deductions to the community budget also increased significantly in 2022 and 2023.
It turned out that the state paid the salaries of the military, the tax went to the budget of local communities, and the state had to provide for the military again. Defense spending, including military salaries, cannot be financed by international partners. This can only be done with taxes paid to the state budget directly by Ukrainians. That is why the state has reclaimed the “military” and “security” personal income tax to fulfill its functions.
But even after the local budget de facto ran out of defense funds, citizens still picketed local governments, demanding more funds to support the Armed Forces.
A rally near the Kyiv City Council in early 2024
One of the architects of decentralization, expert Yuriy Hanushchak explains that the state should have a division of functions between the national and local levels of government, and each level should have adequate funding to perform these functions:
How to distribute this personal income tax is a matter of debate.
Mykhailo Leichenko, Deputy Director of the Center for Innovation Development for Analytics and IT, whose team was involved in data collection and processing, explains:
Given that the Ministry of Finance’s Open Budget system does not provide detailed breakdowns of expenditure categories required for this research, the data presented in this publication is based on quantitative indicators received directly from communities. These were then cross-referenced with the figures submitted by the same communities to Open Budget to ensure the accuracy of the analysis.
According to the data provided by local governments, Dnipropetrovsk region offered the most support to the defense forces during the first three quarters of 2024 — nearly 786 million UAH was allocated from local budgets.
Odesa region ranked second, with expenditures reaching 586 million UAH. (Updated).
(Graphic updated)
Oleksandr Slobozhan, Executive Director of the Association of Ukrainian Cities, emphasizes that since the beginning of the full-scale war, international experts have named local self-government and decentralization reform as one of the factors of victory, which has created a unique system with more than a thousand sources of support for the Armed Forces:
It is worth noting that the data collected for the three quarters of last year did not include the amount of money spent on emergency services, assistance to military families, etc. Only funds for the defense forces were counted. Therefore, the amount of aid is actually higher.
If we analyze the amounts that communities have returned from the local budget in the form of subventions to support the defense forces to the state budget for further distribution, Kyiv tops the ranking. According to the city’s plans, more than UAH 4.4 billion should have been transferred from the capital’s budget to the state budget last year.
At the same time, Serhiy Ohorodnyk, a journalist from Kyiv who covered the activities of the Kyiv City Council for the CHESNO movement and went to the front from the first days of the full-scale invasion in February 2022, explains that given that the function of providing defense belongs to the state, local authorities will not be able to cover all needs:
Serhiy Ohorodnyk, photo of the 78th Air Assault Regiment
At the beginning of the year, ZN.UA wrote that the Ministry of Defense submitted a resolution to the Cabinet of Ministers on payments to military personnel from local budgets.
However, this initiative directly violates the principle of equality of citizens, including military personnel. After all, the military from capable communities will receive UAH 100, 400 thousand, while those from poor, unable communities will not. That is a topic for a whole other discussion.
Despite the fact that communities are now helping the frontline at the tactical level, the amounts they have allocated for defense are considerable for local budgets. War is always a significant expense, and therefore the total amount in the overall defense budget is not significant. However, these funds should be used effectively. There should be appropriate coordination between local governments and the Ministry of Defense. This is emphasized by Deputy Minister Denys Uliutin:
Indeed, the problem lies in the transparency and quality of what is purchased. Mykhailo Leichenko, a representative of the Center for Innovation Development, emphasizes that local budget expenditures on procurement should be visible to citizens:
These samples are tested and verified for safety and effectiveness. Of course, the Ministry of Defense has more information about the needs of our soldiers. For obvious reasons, not all procurements at this level are visible, which increases corruption risks and calls into question the effectiveness of such spending.
Leichenko adds that the Defense Research Cluster has studied the index of promoting efficiency of the Ministry of Defense in terms of order planning and development of weapons and military equipment:
P.S. Today marks 40 days since the founder of the Center for Innovation Development, Serhiy Loboyko, who started this project, passed away. With this publication and the full research, we show everyone that his work is not only alive, but we are continuing it. This is important not only for his family but also for us and our readers. May he rest in peace.
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! If a local government body that did not provide data in time to requests during the preparation of the study wishes to do so, they can be sent to survey@cid.center.
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