Page 38 - UKRRptNov18

Tax revenue improved 17.9% y/y, keeping almost the same growth rate as in August. In particular, the enterprise profit tax surged 116% y/y, accelerating from 31% y/y growth in August.
Meanwhile, net VAT receipts dropped 22% y/y (vs. 23% y/y growth in August) amid decelerated growth of VAT receipts (9.7% y/y growth in September vs. 21% y/y growth in August) and boosted VAT reimbursement (29% y/y growth in September vs. 9.3% y/y growth in August). Personal tax income advanced 20.1% y/y.
Non-tax revenue advanced 23.7% y/y, accelerating from 10.3% growth y/y in the previous month. In particular, income from ownership and entrepreneurship surged 179% y/y.
In January-September, the general budget posted a surplus of UAH15.5bn amid revenue growth of 15.6% y/y and an expenditure surge of 20.3% y/y.
General budget revenue has already met 72% of the 2018 plan in January-August, while expenditures are at 65%.
"A seasonal month-to-month drop in September budget revenue resulted in the general budget deficit," Evgeniya Akhtyrko at Kyiv-based brokerage Concorde Capital wrote in a note on October 29. "We expect the budget to stay in deficit through the end of the year, amid a traditional year-end surge in budget spending. At the moment, we expect the 2018 budget parameters to be close to those planned (state budget deficit not exceeding 2.5% of GDP)."
Ukrainian Prime Minister Volodymyr Groysman he expects the nation's parliament, the Verkhovna Rada, to greenlight the country's draft state budget for 2019 at first reading by October 19, the PM wrote on his official Facebook page on October 16.
Groysman added that lawmakers already submitted more than 2,000 amendments to the draft budget.
The approval of the IMF-compliant state budget for 2016 is crucially important for Kyiv's cooperation with the country's main donor, the International Monetary Fund (IMF). Among other conditions for possible repackaging undrawn funds from the existing $17.5bn Extended Fund Facility (EFF) agreed in 2015 into a $5bn-$6bn Stand-By Arrangement (SBA) are the increase the gas price for households, as well as the implementation of anti-corruption measures.
The IMF has effectively punished the Ukrainian government for foot-dragging on reforms by downgrading the countries deal from the EFF, which runs over many years, the simpler and tougher SBA, which runs for a year, has more stringent checks and has to be renewed each year in negotiations with the IMF.
In October, the IMF said that it forecasts Ukraine's budget deficit this year will amount to 2.5% of GDP, in 2019 - 2.6% of GDP. It then it is expected to decline to 2.3% of GDP in 2020, to 2.2% of GDP in 2021, to 2.2% of GDP in 2022 and up to 2.1% of GDP in 2023.
Ukraine has received $8.4bn from the IMF so far under the multinational lender's EFF.
Meanwhile, former premier and Batkivshchyna (Fatherland) party leader Yulia Tymoshenko has slammed the 2019 draft state budget as a budget "of complete stagnation".
"I want to draw your attention to the fact that this budget leaves the country's gross domestic product almost below the ground level, 36.5% lower in currency terms than it was in 2013," Interfax news agency quoted Tymoshenko
38 UKRAINE Country Report November 2018 www.intellinews.com