Government approves compensation to communities that had significant share of "military" PIT

According to Ukrinform, this was reported by the press service of the Ministry of Finance.

"On December 19, at a government meeting, the mechanism for distributing additional subsidies for October-December 2023 to those local communities in which military personal income tax accounts for a significant share of the structure of revenues from this tax was approved," the statement said.

At the same time, all local communities that experienced a decrease in revenues (excluding military personal income tax) in October-November 2023 will also receive financial compensation. The amount of compensation will be such that their revenues will be equivalent to those of the same period last year.

The Ministry of Finance reminds that, according to Ukrainian legislation, the income of military personnel is subject to personal income tax (PIT), and the corresponding amounts of tax are withheld from their salaries. However, the amount of personal income tax withheld is immediately reimbursed to servicemen from the state budget. This means that, in practice, military personnel do not have their paychecks reduced due to the payment of the tax. In other words, they receive their salaries in full.

According to the adopted law on the redistribution of the "military" personal income tax, the additional resource received in 2024 in the amount of UAH 96.3 billion will be allocated to the special fund of the state budget for specific purposes. 45% for the production and purchase of special equipment and machinery (drones, marine drones) - to the State Special Communications Service. 45% - to the Ministry of Strategic Industry for the implementation of programs for reforming and developing the defense industry, introducing new technologies and for the manufacture of defense products.10% - to the security and defense sector managers for automatic distribution among military units in proportion to the personal income tax paid.

As reported, the resources of local budgets for 2024 will total more than UAH 279 billion. Local budgets will receive approximately UAH 225 billion from personal income tax.