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6.1.1 Budget dynamics - results
Ukraine’s general budget switched to a UAH43.9bn deficit in September
from a UAH17.0bn surplus in August, the State Treasury reported on October 26.
Budget revenue increased 10.4% y/y to UAH100.5bn in September, slowing from 12.8% y/y growth in August. General budget expenditures surged 23.3% y/y to UAH143.7bn, accelerating from 10.5% y/y in the prior month. In particular, state budget expenditures advanced 44.3% y/y, while local budget expenditures declined 10.0% y/y.
In 9M20, the general budget deficit amounted to UAH59.0bn (vs. a surplus of UAH8.7bn in 9M19).
Tax revenue increased 9.7% y/y to UAH88.2bn in September, slowing from 10.5% y/y growth in August. In particular, personal income tax revenue surged 17.6% y/y (vs. 4.4% y/y growth in August). Net VAT revenue jumped 31.7% y/y (vs. a 71.8% y/y surge in August), as VAT reimbursement fell 3.8% y/y and gross revenue climbed 10.8% y/y. Meanwhile, enterprise profit tax proceeds plummeted 41.5% y/y (vs. a 12.9% y/y decline in August). Resource royalty payments dropped 30.6% y/y (vs. 7.6% y/y growth in August).
Non-tax revenue advanced 15.0% y/y to UAH0.5bn in September (after surging 35.1% y/y in August). In particular, the revenue of budget-financed entities jumped 21.3% y/y. “Other” non-tax revenue advanced 14.2% y/y. At the same time, administrative payments and revenue from non-commercial activities declined 13.9% y/y.
In September, the authorities started to exercise their “right” of budget spending that had been allowed by the budget plan adopted amid the pandemic panic. It’s very likely budget expenditures in October will surge, fueled by the desire to spike the popularity of president Zelenskiy’s political force – The People’s Servant party – ahead of the October 25 local elections.
The disproportion between state and local budget expenditures, which has been observed since the end of the previous year, is more evidence that budget resources are being actively used by central authorities as a tool to serve their interests, to the detriment of the needs of local communities.
Ukraine's state budget revenue rose 3.3% y/y to UAH765bn in 9M20,
which is 1.5% below plan, the State Treasury provisionally reported on October 1. Net tax revenue jumped 17.0% y/y to UAH387bn (7.3% above plan) amid 9.6% y/y growth in gross tax revenue and a 11.2% y/y fall in VAT 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
36 UKRAINE Country Report November 2020 www.intellinews.com
