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In November alone, net tax revenue surged 27.8% y/y (vs. 25.0% y/y growth in October) to UAH45.2bn, which is 6.5% below plan. Customs revenue increased 11.6% y/y to UAH33.6bn, which is 0.1% below plan.
Other budget revenue in November rose 39.3% y/y to UAH9.5bn, which exceeds plan by four times. November state budget revenue of UAH95.7bn (24.3% y/y growth) was 2.5% above plan.
Local budgets’ 11M18 revenue increased 16.2% y/y to UAH222bn, outperforming plan by 2.3%. Social payments (personal income tax and pension fund contributions paid by employers) jumped 26.8% y/y to UAH204bn.
“The 11M state budget revenue results imply that the 2018 state budget is likely to slightly underperform on the revenue side. As we expected, the government has been trying to compensate underpaid transfers from the central bank –, which has its own budgeting process – to the budget by boosted collections of tax and customs revenue. However, this method is likely to involve additional (and not always justified) pressure on business in the country,” Evgeniya Akhtyrko. “Should the 2018 state budget revenue be lower than expected, the government is likely to cut budget expenditures in order to prevent the budget deficit from exceeding 2.5% of GDP, which could upset the IMF.”
Ukraine’s general budget deficit reached UAH251mn ($8.9mn) in October,
growing from a UAH19.6mn deficit in September, the State Treasury reported on November 27. General budget revenue increased 15.2% y/y to UAH95.7bn, slowing from 18.7% y/y growth in September. Budget expenditures rose 2.8% y/y to UAH95.9bn, slowing from 6.0% y/y growth in September.
Tax revenue improved 22.5% y/y, speeding up from 17.9% y/y growth in September. In particular, rent payments for the use of natural resources surged 126% y/y after 8.8% y/y decline in September. In addition, net VAT receipts grew 22% y/y (vs. 22% y/y decline in September) amid slowed VAT reimbursement (5% y/y growth in October vs. 29% y/y growth in September). Personal tax income advanced 24% y/y. Meanwhile, receipts from enterprise profit tax inched up 0.6% y/y (after a 116% y/y surge in September).
Non-tax revenue dropped 28.4% y/y, after 23.7% y/y growth in the previous month. In particular, income from ownership and entrepreneurship plummeted 82% y/y after a 179% y/y surge in September.
In 10M18, the general budget posted a surplus of UAH15.3bn amid revenue growth of 15.6% y/y and an expenditure surge of 18.2% y/y. General budget revenue met 80% of the 2018 plan in 10M18, while expenditures were at 72%.
The Ukrainian parliament early on November 23 approved next year’s state budget bill in a move that could unlock $3.9bn in aid from the International Monetary Fund.
The 2019 budget boosts spending on defence and security, healthcare, and infrastructure.
Total Spending: UAH1.11 trillion ($39.6bn) Deficit: UAH89.9bn ($3.2bn)
Defence and security: UAH211.9bn ($7.6bn) Pensions: UAH167.5bn ($5.9bn) Healthcare: UAH95.7bn ($3.4bn)
Education: UAH126.9bn ($4.5bn)
41 UKRAINE Country Report December 2018 www.intellinews.com