Page 29 - UKRRptFeb20

UAH1.095 trillion​, including UAH975.17bn for the general fund, and expenditure of UAH1.182 trillion, including UAH1.052 trillion for the general fund. The ceiling for the deficit is set at UAH94.3bn, or 2.09% of forecast GDP.
In December alone, general budget deficit enlarged to UAH77.4bn ​from a UAH6.2bn deficit in November, the State Treasury reported on January 27. General budget revenue increased 14.9% y/y to UAH126bn, after dropping 4.4% y/y in November. Budget expenditures rose 1.4% y/y to UAH201bn, slowing from 7.3% y/y growth in November.
Tax revenue swelled 16.9% y/y,​ speeding up from 3.1% y/y growth in November. In particular, enterprise profit tax revenue surged almost three times y/y after 18.9% y/y growth in November. Personal income tax revenue accelerated to 17.1% y/y growth from a 13.3% y/y improvement in November. VAT revenue advanced 22.6% y/y (vs. 12.3% y/y growth in November) while VAT reimbursement declined 2.2% y/y (vs. a 17.0% y/y drop in November).
Non-tax revenue increased 11.2% y/y,​ after plummeting 50.2% y/y in November. In particular, income from ownership and entrepreneurship jumped 51.0% y/y (vs. a 83.4% y/y plunge in November). This increase was mostly secured by income and dividends transferred to the budget by state enterprises.
Customs revenue declined 5.6% y/y​ to UAH320bn (9.3% below plan).
Local budgets' fiscal revenue improved 15.7% y/y to UAH283bn in 2019,
which is 1.5% above plan. Social payments (pension and other social fund contributions paid by employers) advanced 19.9% y/y to UAH273bn.
In December alone, Ukraine’s state budget revenue jumped 16.1% y/y to UAH99bn,​ which is 28.8% above plan. Net tax receipts advanced 41.5% y/y to UAH47bn, which is 31.1% above plan. In particular, general tax revenue rose 31.3% y/y to UAH56bn, while VAT reimbursement fell 2.2% y/y to UAH10bn. Customs revenue increased 2.2% y/y to UAH30bn, which is 11.4% above plan.
The deficit was financed by government borrowing,​ which exceeded plan by 4%, while privatization receipts made only 3.1% of plan. The 2019 state budget deficit was almost entirely funded by borrowings, as revenues from privatization amounted to only UAH550mn.dw
“The government made a significant effort to improve the picture of budget revenues in December. In particular, the state ​required Naftogaz to make advanced payments​ in the form of dividends and other tax payments to the budget of around UAH 13 bln. A significant jump in revenues drawn from the enterprise profit tax implies others were also urged to pay in advance. Some delays with VAT reimbursement to exporters could also have been a factor. These immediate fixes, coupled with the ​cut of budget expenditures in December​, clearly show that the situation with budget collections became a real problem at the year end for the neophyte government. Such problems with budget collections are likely to extend through this year, given a ​significant decline in industrial output​ and c​ ooling inflation​. If budget collections remain significantly weaker than expected, the Cabinet will have to resort to a systemic and explicit cut in budget expenditures, which is likely to cause discontent in society and destabilize the government's position,” Concorde Capital said in a note.
29​ UKRAINE Country Report​ February 2020 ​ ​www.intellinews.com