Page 31 - UKRRptDec21

6.1 Budget
6.1.1 Budget dynamics - results
The budget revenue plan for the first three quarters of 2021 was exceeded by UAH29bn – announced Valery Patskan. “The reason of the surplus was due to over fulfillment of the plan of revenues from VAT, excise duty on goods imported into Ukraine and rent for subsoil use”, said Patskan.
Ukraine’s general budget deficit shrank to UAH8.4bn in October from
UAH32.0bn in the prior month, the State Treasury reported on November 25. General budget revenue surged 22% y/y to UAH129.4bn after increasing 30% y/y in September. General budget expenditures inched up 1% y/y to UAH138.0bn, after increasing 13% y/y in September.
In 10M21, the general budget deficit amounted to UAH5.9bn (vs. a deficit of UAH89.4bn in 10M20).
Tax revenue jumped 21% y/y to UAH116.4bn in October, slowing from 29% y/y growth in September. In particular, enterprise profit tax more surged 77.6% y/y. Net VAT increased 27% y/y (vs. 13% y/y growth in September) as gross VAT revenue increased 21% y/y and VAT reimbursement increased 15% y/y.
VAT on imported goods jumped 26% y/y; revenue from personal income tax increased 15% y/y.
Non-tax revenue jumped 37% y/y to UAH12.3bn in October (after surging 44% y/y in September). In particular, the revenue from ownership and entrepreneurial activity surged 89% y/y, the revenue of budget-financed entities jumped 56% y/y. At the same time, administrative payments dropped 19% y/y.
The budget deficit was quite moderate in October, mostly due to restrained government expenditures. The growth of revenue is slowing but it still looks impressive. We expect to see a significant seasonal increase of budget expenditures in the last two months of 2021.
The deficit of the state budget of Ukraine in 2021 may amount to UAH170bn ($6.5bn) with an annual plan of UAH220bn, Daryna Marchak, the head of the center for analysis of public finance and public administration of the Kyiv School of Economics (KSE), told Interfax on November 9.
"According to our estimates, at the end of 2021, the deficit of the general fund of the state budget will be slightly lower than provided for by the law on the state budget, due to cost savings (which we expect at the level of 3% of the expenditure part of the budget general fund) and debt payments," Marchak said, as cited by Interfax Ukraine.
Financing the state budget deficit will nevertheless require more debt borrowings by the Ministry of Finance, which is difficult to implement without active cooperation with the International Monetary Fund and access to foreign markets, she added.
According to the center's estimates, in January-November 2021, the deficit of
31 UKRAINE Country Report December 2021 www.intellinews.com