The Ukrainian Ministry of Defense estimates that defense spending will rise to $175 billion in 2027 from $155 billion in 2026; the government’s draft state budget currently allocates $100 billion, First Deputy Minister of Finance Roman Yermolichev said during a budget discussion organized by the Center for Economic Strategy that week.
“There is a need for $70 billion. And here, various instruments must be utilized, including cooperation with international partners, not only to attract funding but also to use various instruments that have been in place for the past four years: ‘Ramstein,’ PURL, and all other mechanisms related to the procurement of military equipment,” the First Deputy Minister noted.
He emphasized that when planning defense expenditures in the 2027 draft state budget, the Ministry of Finance significantly changed its approach compared to previous years, when initial allocations were set below actual needs.
“We have now changed this situation and increased funding for the defense sector immediately: funding has been increased by 518 billion hryvnia—that is, from 4.4 trillion to 4.9 trillion hryvnia next year,” said Yermolichev.
The First Deputy Minister explained that the 2026 state budget does not currently include an additional 300 billion hryvnias for the payment of military pay—which was increased as of July 1—and defense-related social benefits, which will be financed from domestic sources, but this 300 billion UAH has already been included in the 518 billion UAH increase in defense spending in the draft 2027 state budget.
At the same time, he clarified that the calculations were made without taking into account the factor of an increase in military personnel, which is difficult to predict.
“Therefore, we hope that by the beginning of the year, we will be in a more or less stable position. Additionally, we have increased the allocation to the Reserve Fund under the Ministry of Finance: this year, we allocated approximately 140 billion hryvnias from the General Fund, whereas for next year, we have already allocated 200 billion hryvnias from the General Fund,” Yermolichev concluded.
As previously reported, the funding shortfall for the Ministry of Defense’s stated $155 billion war requirement for 2026 was, until recently, estimated at $27 billion, but Prime Minister Serhiy Koretsky and the Ministry of Finance stated that $7 billion—or about 300 billion hryvnias—of this amount has been secured through domestic resources, specifically the Ministry of Finance’s Reserve Fund.
As for next year, according to the agency “Interfax-Ukraine,” out of the $70–75 billion in war-related expenditures not covered by the state budget, sources of funding have been identified for approximately $20 billion, while the remainder still needs to be secured.
DEFENSE, FUNDING, Ministry of Defense, STATE BUDGET, UKRAINE
“Ukrnafta” transferred another 1.43 billion hryvnia in dividends to the state budget.
Since the company came under state control, the total amount of dividends paid has already reached 16.73 billion UAH.
“Despite the widespread destruction of production infrastructure caused by Russian attacks, the need to restore and replace damaged equipment, as well as additional investments in facility security, “Ukrnafta” ensured stable transfers of a portion of its net profit to the state budget in 2025,” said Bohdan Kukura, Chairman of the Board of JSC “Ukrnafta.”
Currently, the intensity of shelling and destruction of the company’s production infrastructure and network of gas stations in frontline territories is increasing. Additional factors affecting the company’s financial condition include the global oil crisis, the need to import additional volumes of fuel in early 2026 to avoid a shortage of petroleum products in the country, and the obligation to allocate all domestically produced gas to meet the needs of the population.
Even under these conditions, the company maintains operational stability, continues production, supplies the country with high-quality fuel, invests in development, and fully fulfills its obligations to the state and local budgets.
JSC “Ukrnafta” is Ukraine’s largest oil producer and operates the country’s largest national network of gas stations—UKRNAFTA. In 2024, the company began managing Glusco’s assets. In 2025, it finalized an agreement with Shell Overseas Investments BV to acquire the Shell network in Ukraine. In total, it operates nearly 700 gas stations.
The company is implementing a comprehensive program to resume operations and modernize the format of the gas stations in its network. Since February 2023, it has been issuing its own fuel vouchers and “NAFTACard” cards, which are sold to legal entities and individuals through Ukrnafta-Postach LLC.
The largest shareholder of Ukrnafta is NAK Naftogaz of Ukraine, with a stake of 50% + 1 share.
In November 2022, the Supreme Commander-in-Chief of the Armed Forces of Ukraine decided to transfer to the state the portion of the company’s corporate rights that belonged to private owners; this portion is now managed by the Ministry of Defense.
According to the results of 2025, the state-owned enterprise “Forests of Ukraine” ranked among the top three contributors to the state budget with UAH 5.9 billion in accrued dividends, more than four times the level of 2024 (UAH 1.3 billion), the state-owned enterprise’s press service reported on Facebook.
According to the report, the leaders in terms of accrued dividends were also JSC “NAEK ‘Energoatom’ (UAH 9.3 billion) and PJSC ”Ukrhydroenergo” (UAH 6.3 billion).
As noted with reference to the Ministry of Economy, Environment, and Agriculture of Ukraine, the growth in these figures was driven by systemic changes: the open sale of forest products, the transition to procurement through Prozorro, the divestment of non-core business areas, and cost optimization.
According to the company, in January–March 2026, the volume of timber harvesting increased to nearly 3 million cubic meters, which is 50% more compared to the same period in 2023. Net revenue for the reporting period rose by 87% to UAH 8.6 billion, while pre-tax profit increased by 273% to UAH 3 billion. The return on operations for the quarter reached 34.9%.
Tax payments by the state-owned enterprise “Forests of Ukraine” in the first quarter of 2026 increased by 166% compared to the first quarter of 2023, reaching UAH 4 billion.
As of early May 2026, the enterprise had increased timber harvesting by 560,000 cubic meters compared to last year’s figures. The state-owned enterprise’s share of the country’s total timber harvest rose from 83% to 88%.
State Enterprise “Forests of Ukraine” has now launched a modernization program to transition to mechanized timber harvesting. Last week, the first contract for the supply of harvesters from Sweden was signed. The program also includes the renewal of the firefighting equipment fleet and the operation of a modern seed center.
State-owned LLC “Land Bank” transferred UAH 369 million in dividends to the state budget based on its 2025 performance, representing 95% of the company’s net profit, the operator’s press service reported on its Telegram channel.
According to the report, this figure is one of the highest in terms of profit return to the state among enterprises under the management of the State Property Fund of Ukraine (SPFU).
“This is an example of how state assets can function as a fully-fledged economic instrument. The Land Bank proves that instead of passive holding, the state can achieve tangible financial results,” emphasized SPFU Chairman Dmytro Natalukha.
According to the CEO of State Land Bank LLC Yaroslav Yaroslavsky, based on last year’s results, the company made it onto the list of major taxpayers, ranking 12th among state-owned enterprises by revenue alongside giants such as “Naftogaz,” “Ukrenergo,” and “Ukrzaliznytsia.”
The “Land Bank” is a state-owned operator established to manage agricultural land through a long-term lease mechanism. 100% of the company’s shares are owned by the state, represented by the State Property Fund of Ukraine.
The project was officially launched in 2024 to consolidate state-owned land and sell it through online auctions on the “Prozorro.Sales” platform. The first auctions for land leases began in the fall of 2024, allowing the operator to achieve significant financial results in its very first full year of operation. According to the State Property Fund of Ukraine, the company currently manages over 100,000 hectares of land.
Ukraine’s state budget revenue for January–March 2026 amounted to 1.02 trillion UAH, including 734.6 billion UAH from the general fund, representing increases of 10.2% and 26.3% respectively compared with the previous year, the Ministry of Finance reported, citing provisional data from the State Treasury.
Cash expenditure from the general fund over the three months rose by 7.1% to UAH 914.8 billion, whilst total budget expenditure, including the special fund, fell by 1.1% to UAH 1.15 trillion.
Actual revenues to the general fund of the state budget from taxes and fees controlled by the State Tax Service of Ukraine (STS) amounted to UAH 1 trillion 246 billion in January-December 2025, which is 20.2% or UAH 209.3 billion more than last year, according to a publication on the institution’s website.
According to the STS, despite an increase in planned indicators during the year by more than UAH 100 billion, the annual revenue plan was fulfilled by 97.4%.
According to the acting head of the State Tax Service, Lesya Karnaukh, quoted in the report, the stable over-fulfillment of targets during the first half of the year created the necessary financial reserve, which made it possible to avoid significant shortfalls at the end of the year.
It is noted that in the structure of the main sources of budget revenues for the 12 months of 2025, the largest share was provided by personal income tax and fees, which amounted to UAH 362.9 billion. Value added tax (including budget refunds) brought UAH 306.5 billion to the budget, and corporate income tax brought UAH 284.7 billion. In addition, excise tax revenues amounted to UAH 163.9 billion, while rent payments provided UAH 48.4 billion.
Karnaukh separately highlighted the dynamics of VAT budget refunds, which totaled UAH 179.6 billion for the year. At the same time, the monthly refund rate during the year was not less than UAH 13 billion.
“Today, businesses have to reorient significant financial resources and invest in recovery and relocation. I am grateful to everyone who does not give up,” said the acting head of the State Tax Service.
She also added that the achievement of these indicators in the context of war, shelling, and energy challenges is the result of the responsibility of each taxpayer.
