The revenues of the consolidated state budget next year are planned to be 15.1 billion euros, while the expenses are 17.1 billion euros, according to the draft law "On the state budget for 2025 and the budget framework for 2025, 2026, and for 2027". The draft budget includes another 31 bills related to the budget.
Compared to the 2024 budget, next year's planned state budget revenues are planned to be 583.2 million euros higher, while expenses are planned to be 876.5 million euros higher than in this year's budget law. The budget deficit next year is planned to be 2.9 percent of the gross domestic product.
Next year, additional funding of 392.4 million euros is planned for 'priority measures'. Taking into account the need to strengthen national security, 284.3 million euros of this money are earmarked next year for internal and external security, including continued support for Ukraine.
From next year, a larger portion of the old-age pension is expected to be indexed, an increase in various benefits is planned, including raising the parental allowance for working parents from the current 50 percent to 75 percent. Next year, the minimum wage will increase from the previous 700 euros to 740 euros per month.
Additional funding is planned for reimbursable medications, primary health care, laboratory examinations, improvement of oncology services, as well as strengthening of the emergency medical assistance service. Also, additional money is intended for higher pay for those working in the field of internal affairs and other services.
The labor tax system will also see changes next year. It is planned to introduce two personal income tax rates and one additional rate. A rate of 25.5 percent is provided for gross income up to 8,775 euros per month, and a 33 percent rate for income above 8,775 euros per month. On the other hand, an additional rate of three percent is planned for incomes over 200 thousand euros per year.
The existing differentiated non-taxable minimum is expected to be replaced by a single non-taxable minimum for all salaries. Next year they will be 510 euros, in 2026 – 550 euros, and in 2027 the non-taxable minimum is planned to be 570 euros. The non-taxable minimum for pensioners is planned to be increased from the current 500 euros to one thousand euros per month, while royalties recipients will be able not to register as economic operators until the end of 2027.
From next year, it is planned to simplify the administrative procedures for those working in the micro-enterprise tax regime, including those who perform economic activity irregularly, and the possibility to register for the micro-enterprise tax regime for a temporary period of time is planned.
The application of the reduced rate of value added tax of 12 percent to fresh fruits, berries and vegetables will continue. On the other hand, in order to increase economic activity and thus also budget revenues, it is planned to set solidarity contributions for credit institutions. From next year until the end of 2028, it is planned to transfer one percentage point from the second pension level to the first pension level.
The draft budget also provides for measures to reduce the shadow economy - non-cash payments in retail trade are encouraged, banks are obliged to inform the State Revenue Service about suspicious transactions in personal accounts, the working time accounting system at construction sites is strengthened, as well as increased responsibility of businessmen for violations in commercial transport by taxi.
Next year, it is planned to raise the road use fee, to increase the vehicle operating tax by an average of 10 percent, as well as to increase the vehicle operating tax for company light vehicles by an average of 10 percent from the 2027 rate. Starting next year, it is planned to increase the gambling tax, as well as to increase the fees for the re-registration of the license to organize gambling.
It is also planned to increase natural resource tax rates for coal, coke and lignite, as well as to gradually increase the excise tax on fuel, natural gas and petroleum gases used as fuel from next year. It is planned to cancel the tax exemption for oil products used in electricity production and cogeneration.
From 2027, it is planned to increase the excise tax rates for alcoholic beverages, including beer, tobacco products, and from 2025 - for non-alcoholic beverages with a sugar level of up to eight grams per 100 milliliters.
Despite the passing of the budget in the first reading, the coalition will still have to put in serious work to get it passed. Traditionally the second reading is when the opposition parties take the opportunity to heap criticism on the government's plans. It has become almost a rite of passage that the final budget reading turns into a marathon session testing the endurance of deputies, journalists and the general public alike.
The final reading of the 2025 state budget draft and 31 accompanying bills is scheduled to take place on December 4.
