Ukraine needs to increase the production of its own drones, weapons and ammunition.

To this end, the Cabinet of Ministers has submitted a draft law proposing that military income tax – the tax paid by the state on behalf of the military – be used for the purchase of equipment and the domestic production of weapons. This was announced by Prime Minister Denys Shmyhal.

“During the full-scale invasion, local budget revenues from military personal income tax increased eightfold. In 2023, the projected amount will be over UAH 96 billion. While in 2021 it was about UAH 12 billion. This growth is only due to the fact that the state is increasing spending on defence sector and military salaries,” the Head of Government said.

The Prime Minister stressed that Ukraine’s security and defence forces needed more resources. According to him, the Government’s draft law will make it possible to raise UAH 25.8 billion this year and UAH 93.7 billion next year for additional purchases of drones and to increase domestic production of weapons.

At the same time, more than UAH 200 billion already accumulated in the accounts of local budgets and budgetary institutions will remain at the disposal of local authorities.

Denys Shmyhal noted that the state would provide a basic subsidy and a reverse subsidy to those communities that objectively lacked funds. Thus, in 2024, local budgets will have UAH 75 billion more than in 2021, before the full-scale invasion.