Page 36 - UKRRptOct21

n $22mn – repairing locks on the Dnipro
n $30mn – digitalization – internet for rural areas; Diya app; paperless government; and 2022 census
n $51bn in total spending
Tax revenues exceed the target. In January-August 2021, the general fund of the state budget received UAH700bn, which is 104.1% of the target for this period, the Ukrainian Finance Ministry reports. “Revenues from payments controlled by the State Tax Service amounted to UAH409.9bn, the target for January-August was fulfilled by 105.4% (+ UAH21.0bn), the State Customs Service - UAH244.1bn, the target fulfilled by 103.5% (+8.3bn UAH).,”.
Ukraine’s general budget switched to a surplus of UAH52.9bn in August
from a deficit of UAH3.8bn in the prior month, the State Treasury reported on September 24.
General budget revenue surged 35% y/y to UAH174.0bn after increasing 26% y/y in July. General budget expenditures inched up 8% y/y to UAH120.8bn, after increasing 1% y/y in July.
In 8M21, the general budget surplus amounted to UAH34.5bn (vs. a deficit of UAH15.1bn in 8M20).
Tax revenue jumped 37% y/y to UAH156.9bn in August, accelerating from 28% y/y growth in July. In particular, enterprise profit tax more than doubled year on year, VAT on imported goods surged 38% y/y. The revenue from personal income tax increased 20% y/y. Meanwhile, net VAT inched up 4% y/y (vs. 29% y/y in July) as gross VAT revenue increased 12% y/y and VAT reimbursement increased 26% y/y.
Non-tax revenue increased 20% y/y to UAH16.4bn in August (after increasing 20% y/y in July). In particular, the revenue of budget-financed entities increased 47% y/y; administrative payments advanced 39% y/y. Meanwhile, revenue from ownership and entrepreneurship dropped 53% y/y.
It is typical for the Ukrainian budget to switch to a surplus in August as a result of moderate budget expenditures during the peak of the holiday season in the country. However, the surplus of this year is incredibly high. It would be logical for the government to accelerate expenditures for the construction of infrastructure while the weather permits. It might be that the growth potential of this government project is currently limited by the lack of labor and technical resources.
6.1.2 Budget dynamics - specific issues...
To stimulate economic growth in dying coal mining towns, the Rada is supporting creating a 15-year tax holiday for new companies setting up in designated towns. “Mines are currently on the verge of closure, people may lose their jobs and livelihoods, Deputy Finance Minister Svitlana Vorobey told the Rada Tax Committee yesterday. Interfax-Ukraine reports the Committee voted to approve a measure that would exempt start up companies from paying VAT, corporate income taxes and rent for government-owned land.
36 UKRAINE Country Report October 2021 www.intellinews.com