Russian attacks on businesses cost the government 32 billion hryvnia
Due to Russian attacks on Ukrainian businesses in August and September, the state budget lost approximately 32 billion hryvnia in taxes and fees. Overall, over the first nine months, general fund revenues—excluding international grants—fell short of the target by 49.5 billion hryvnia.
According to preliminary data, from January through September 2026, the general fund of the state budget, excluding international grants, received 1.9 trillion UAH. However, the revenue target for this period was not fully met. The budget fell short by 49.5 billion UAH. Nearly two-thirds of this amount was lost in August and September alone. According to Roksolana Pidlasa, the budget fell short by approximately 32 billion hryvnias during these two months, and she cited constant Russian attacks on businesses as the main reason.
“The main reason is the constant Russian attacks on businesses,” wrote the chair of the Budget Committee. This refers to revenues from businesses and consumer spending, which make up a significant portion of the state’s income. When businesses halt operations due to shelling, lose production capacity, or are forced to operate intermittently, this ultimately affects tax revenues.
Where Does the Money for the Budget Come From?
Among the main sources of revenue for the General Fund over the nine-month period, Pidlasa cited import VAT. It brought 491 billion hryvnias to the budget. Another 270 billion hryvnias came from corporate income tax. Personal income tax and the military levy together totaled 266.3 billion hryvnias. However, starting in July 2026, the military levy will be credited to a special fund and used to provide financial support to Ukrainian Armed Forces personnel.
VAT on goods produced in Ukraine generated 255.2 billion hryvnias. This amount already takes VAT refunds into account. Other major sources of revenue include funds from the National Bank of Ukraine, import and domestic excise taxes, dividends from state-owned enterprises, import duties, and rent payments. Specifically, funds from the NBU totaled 146.1 billion hryvnia, import excise taxes amounted to 134.6 billion hryvnia, and domestic excise taxes totaled 96.5 billion hryvnia. Dividends and a portion of the net profit of business entities contributed 57.1 billion UAH, import duties—48.4 billion UAH, and resource rent payments—42.6 billion UAH.
Some taxes generated more revenue than planned
At the same time, not all figures fell short of expectations. According to Pidlasa, the budget received more than planned from corporate income tax. The overperformance amounts to 29 billion UAH, or about 12%.
Personal income tax and the military levy also exceeded the plan by 6.6 billion UAH. This represents an overperformance of approximately 2.6%. However, these additional revenues were not enough to offset the shortfall in other major taxes.
Where the Budget Fell Short the Most
The biggest problems arose with taxes that are directly dependent on import volumes and the operations of Ukrainian businesses. Specifically, the target for import VAT was missed by 35.7 billion UAH, or 6.8%. VAT on goods produced in Ukraine fell short of the target by 32.9 billion UAH. This shortfall amounts to 11.4%.
Domestic excise taxes fell short of the budget by 19.1 billion UAH, or 16.5% of the target. An additional 10.8 billion UAH was not collected from dividends and a portion of the net profits of business entities. Overall, the largest taxes and fees fell short of the nine-month target by approximately 99 billion hryvnia. Part of this shortfall was offset by higher-than-expected revenue from corporate income tax, personal income tax, and other payments.
The budget also depends on international aid
Separately, Pidlasa spoke about international financing. According to her, approximately $22 billion in international aid was used from January through September to cover general fund expenditures of the state budget.
An additional 350.6 billion hryvnia was raised over the nine-month period through the issuance of domestic government bonds. In September, this figure increased by nearly 19 billion hryvnia. Against this backdrop, the need for external support remains high. Previously, Pidlasa emphasized that Russian strikes are targeting precisely those sectors of the economy that generate budget revenue.
Where the Money Is Being Spent
The largest expenditure item in the general fund of the state budget for 2026 is defense. Over the first nine months, approximately 2 trillion UAH—or 61.3% of all general fund expenditures—was allocated to this sector. UAH 427.9 billion was used to service domestic and foreign debt.
UAH 342.6 billion was spent on social protection and support for veterans. Servicing the national debt cost UAH 275.2 billion. Another UAH 144 billion was allocated to the medical guarantees program and health screenings.
UAH 116.7 billion was spent on teachers’ salaries, educational subsidies, and additional payments to educators. Approximately UAH 48.5 billion went toward basic and supplementary subsidies. According to Pidlasa, the budget situation will remain challenging until the second tranche of macro-financial assistance from the EU, amounting to $4.26 billion, is received.
Thus, Russian attacks affect public finances not only through direct destruction. When businesses are damaged or forced to suspend operations, the budget also loses a portion of the taxes they would have paid. This was reported on Facebook by Roksolana Pidlasa, chair of the Verkhovna Rada Committee on Budgetary Matters.
Ukraine expects to receive the next tranche of financial budget support from the European Union in the coming days.
