Page 40 - UKRRptOct20

reimbursement. Customs revenue plummeted 12.1% y/y to UAH205bn (14.0% below plan).
Local budgets' fiscal revenue improved 3.3% y/y to UAH212bn in 9M20, which is 5.8% below plan. Social payments (pension and other social fund contributions paid by employers) advanced 5.6% y/y to UAH210bn.
In September alone, state budget revenue increased 11.5% y/y to UAH76bn, which is 15.3% above plan. Net tax revenue jumped 13.1% to 32bn (36.9% above plan) amid 8.1% y/y growth in gross tax revenue and a 3.8% y/y slide in VAT reimbursement. Customs revenue advanced 6.5% y/y to UAH26.9bn (1.1% above plan).
Budget revenue continues to pick up fast. According to some anecdotal evidence, the growth of VAT revenue amid the falling economy is the result of government efforts fighting pervasive corruption schemes with VAT reimbursement (the so-called “skrutka”).
We will continue to observe this trend in order to determine its legitimacy. In any case, this would be a sporadic effort that can bring only a one-off effect. Quality improvement in public finances calls for a systemic anti-corruption program, which is definitely not in the Zelenskiy administration's current agenda.
Ukraine’s general budget switched to a UAH17.0bn surplus in August from a UAH28.7bn deficit in July, the State Treasury reported on September 25.
The jump in August budget revenue was mostly due to the year-on-year decline in VAT reimbursement amid weak exports. The budget expenditures were restrained by lower allocations to the local budgets, while the growth of central budget expenditures was significant. This disproportion between state and local budget expenditures has been observed since the end of the previous year. And this has contributed to the decline in the popularity of the Zelenskiy administration at the local levels.
Budget revenue jumped 12.8% y/y to UAH128.9bn in August after declining 8.0% y/y in July. General budget expenditures increased 10.5% y/y to UAH112.2bn after growing 21.9% y/y in the prior month. In particular, state budget expenditures advanced 29.7% y/y, while local budget expenditures declined 20.2% y/y.
In 8M20, the general budget deficit amounted to UAH15.1bn (vs. a surplus of UAH35.4bn in 8M19).
Tax revenue jumped 10.5% y/y to UAH114.7bn in August, after a 0.8% y/y decline in July. In particular, net VAT revenue surged 71.8% y/y (vs. 29.1% y/y growth in July), as VAT reimbursement fell 24.5% y/y and gross revenue climbed 17.0% y/y. Personal income tax revenue increased 4.4% y/y (vs. a 4.2% y/y decline in July). Resource royalty payments advanced 7.6% y/y (vs. a 38.6% y/y decline in July). Meanwhile, enterprise profit tax proceeds slid 12.9% y/y (vs. a 9.9% y/y decline in July).
Non-tax revenue surged 35.1% y/y to UAH13.7bn in August (after dropping 50.9% y/y in July). In particular, income from ownership and entrepreneurship
40​ UKRAINE Country Report​ October 2020 ​ ​www.intellinews.com