Today, on March 10, the Government approved the first stage of the allocation of an additional UAH 10.2 billion subsidy among 17 regional budgets and 853 budgets of territorial communities. The funds will be used to cover the loss of local budget revenues and additional expenses for IDPs.

During the war, local communities have been negatively affected by the loss of local budget revenues. This is especially true for the territorial communities of Donetsk, Zaporizhzhia, Luhansk, Kharkiv, and Kherson regions.

According to the adopted act, the aforesaid regions will receive UAH 7.4 billion, and local governments in the de-occupied, temporarily occupied and other territories will be eligible to receive additional funding to effectively exercise their powers and meet priority needs at the local level.

For the first time, the Ministry of Finance has provided for an additional UAH 24 billion subsidy from the state budget to local budgets for the exercise of powers of local self-government bodies in the de-occupied, temporarily occupied, and other territories of Ukraine in the state budget for 2023.

This subsidy is distributed by the Cabinet of Ministers of Ukraine in two stages: at the first stage, the distribution was made taking into account the number of IDPs who moved after February 24, 2022, for 13 regional budgets and 517 budgets of territorial communities in the amount of UAH 2.2 billion, as well as actual personal income tax revenues to local budgets for 4 regional budgets and 502 budgets of territorial communities in the amount of UAH 7.9 billion.

At the second stage, the additional subsidy will be distributed on a quarterly basis among local budgets based on the actual PIT (personal income tax) revenues to local budgets. This will make it possible to allocate funds to those communities whose revenues will decrease this year compared to the previous year.