Page 29 - UKRRptAug21

6.0 Public Sector 6.1 Budget
6.1.1 Budget dynamics - results
Ukraine's state budget revenue provisionally rose 12.2% y/y to UAH582.8bn in 1H21, outperforming the plan by 6.5%, the State Treasury reported on July 2. Net tax revenue increased 7.9% y/y to UAH290.9bn (6.2% above the plan) amid 6.1% y/y growth in gross tax revenue and a 0.2% y/y decline in VAT reimbursement. Customs revenue jumped 39.6% y/y to UAH174.6bn (4.8% above the plan).
Local budgets' fiscal revenue improved 20.8% y/y to UAH163.0bn in 1H21, which is 2.5% above the plan. Social payments (pensions and other social fund contributions paid by employers) advanced 19.5% y/y to UAH165.0bn.
In June alone, state budget revenue declined 18.7% y/y to UAH106.7bn, which is 15.9% above the plan. Net tax revenue dropped 43.0% y/y to UAH50.8bn (6.1% above the plan) amid a 37.6% y/y decline in gross tax revenue and a 3.2% y/y increase in VAT reimbursement. Customs revenue surged 44.6% y/y to UAH31.3bn (9.4% above the plan).
Evgeniya Akhtyrko: A very high comparative base from June 2020 (when budget revenue surged 64% y/y) resulted in a year-on-year decline in tax collection last month. Recall, the tax administration made an effort in collecting revenues in June to pick up after the fallout of the lockdown of March-May 2020. The June 2021 decline was apparently expected by the government. Meanwhile, the customs revenue continues growing at a high pace.
The higher comparative base of 2H20 promises fewer swings in year-on-year changes in budget revenue in the upcoming months.
6.1.3 Budget dynamics - funding
Ukraine should receive $2.7bn from the IMF by late August, in time for $3bn in debt payments due in September, Vladislav Rashkovan, Ukraine’s Alternate Executive Director to the IMF, wrote on Facebook from Washington on July 9. The funds will be Ukraine’s portion of a $650bn distribution of IMF money approved Thursday by the IMF Board. "This is a very positive step by the IMF, including for Ukraine, as it will help the government to calmly manage public finances," Rashkovan wrote. The IMF Managing Director, Kristalina Georgieva, said in a statement Friday: “We expect the SDR allocation to be completed by the end of August.”
The Rada overwhelmingly approved the acceptance of a €340mn low interest credit line from the European Investment Bank to restore social and transport infrastructure in regions affected by the war in southeast Ukraine. The funds will also be directed to regions affected by an influx of internal refugees from the war-affected areas.
29 UKRAINE Country Report August 2021 www.intellinews.com