In 2024, allocations totaling 862.6 billion hryvnias were allocated for payments to servicemen, which constitutes over 70% of the budget of the Ministry of Defense of Ukraine. This block includes financial support for military personnel, additional payments, food, material support, and compensation for destroyed equipment.
Deputy Minister of Defense of Ukraine Yuriy Dzhigir discussed this in an interview with Army Inform.
Yuriy Dzhigir explained that the budget of the Ministry of Defense for 2024 can conditionally be divided into three major packages. This approach is guided by NATO countries, as they categorize their defense expenditures.
According to the Deputy Minister, the first and largest package is financial support and combat payments, which according to the Law of Ukraine "On the State Budget of Ukraine for 2024" amounts to 862.6 billion hryvnias.
"However, it is necessary to consider the dynamics of the situation on the front line and the growing needs of the Armed Forces of Ukraine. In case of increased intensity of hostilities, and the increase in the size of the military, there is a need for additional funding, which consequently entails changes in the budget and corresponding government decisions," emphasized Yuriy Dzhigir.
The second package is the purchase of weapons and military equipment, which constitutes more than 20% of Ukraine's defense budget.
"20% is a certain NATO benchmark for military equipment expenditures. Speaking of funds, we have allocated 265.4 billion hryvnias to meet the needs of the military in quality equipment and weapons. I emphasize that these figures are approximate. The needs in the defense sector are dynamic and are constantly refined by the General Staff depending on the combat situation," added the Deputy Minister of Defense.
The third package consists of operational expenses, which include fuel procurement, military training, utility payments, and current repairs.
"All of these funds are provided for in the State Budget. However, this year we have additional funds, including those allocated by the Government from the reserve fund. For instance, in January, the Government allocated 657 million hryvnias to the Ministry of Defense to be directed to military units. These funds are intended for the purchase of equipment and weapons, optical and thermal imaging devices, communication equipment, ammunition production, equipment repair, and maintenance, among other things," announced Yuriy Dzhigir.
Furthermore, there is another innovation in the 2024 Budget. It involves transferring a portion of the personal income tax (PIT) of military personnel from local communities to the state budget, with subsequent automatic transfer of "military PIT" funds to military units in proportion to the tax paid by them. According to Yuriy Dzhigir, it is expected to receive 7.9 billion hryvnias from this source in 2024.
"Another source of revenue is local subsidies for defense needs. Regional centers, amalgamated territorial communities, districts, and cities independently made decisions to allocate funds directly to those military units and for those purposes they deemed most priority. During the past year, nearly 16 billion hryvnias were transferred. The unused balance of these subsidies, amounting to 4.8 billion hryvnias, was transferred as an additional resource to military units for 2024," Yuriy Dzhigir explained.
He also emphasized that making forecasts regarding changes to the budget for 2024 is difficult due to several uncertain factors.
"The defense budget is set against the backdrop of the largest armed conflict in Europe since World War II. Fierce battles continue, the needs of the Defense Forces, and the requirements for them change daily. And such variability of scenarios logically leads to a revision of the financial indicators of the state budget. Therefore, the need for additional funding may change depending on the current situation and objective factors," concluded Yuriy Dzhigir.
