Ukraine's 2027 Budget Partially Restores Road Fund Allocation

Ukraine's draft 2027 budget proposes a partial restoration of the dedicated Road Fund, diverting 25% of road-related tax revenues back to infrastructure after three years of channeling all such proceeds to the general fund for defense needs.

Since 2022, excise duties on fuel and vehicles, as well as road tolls, have been directed entirely to the central budget to support wartime expenditures. The 2027 budget declaration initially envisioned maintaining that 100% allocation. However, the submitted budget bill alters that ratio: 75% will remain in the general fund, while 25% — approximately 52.8 billion hryvnias — will be earmarked for a special road fund.

The earmarked amount breaks down into 34.1 billion hryvnias for road development and maintenance under the State Agency for Restoration and Infrastructure Development, a program slated to receive 34.9 billion hryvnias in 2027 compared with 12.9 billion in 2026, a 2.7-fold increase. An additional 10.1 billion hryvnias will service existing road-loan obligations, and a new 8.5 billion hryvnia subvention will support local roads managed by communities.

The move marks the first time since the full-scale invasion began that road repairs will have a separate financing source. Analysts caution, however, that the general fund — already facing lower revenues than in 2026 — may struggle to absorb the reduced inflow while sustaining defense and social commitments.

The budget proposal now awaits parliamentary review, where lawmakers will weigh the infrastructure boost against competing fiscal pressures.