Page 39 - UKRRptNov19

6.1.1 Budget dynamics - results
The state budget is underfunded by $3.2bn, according to the Accounting Chamber in October. UNIAN reports the government failed to collect $1.5bn, or 5.4% of the entire budget, from VAT on imported goods, taxes on manufactured tobacco, and parts of profits and dividends from state-owned companies
Ukraine’s general budget switched to a UAH25.4bn ($1bn) deficit in September from a UAH12.7bn surplus in the prior month due to increased budget expenditures, the State Treasury reported on October 25. Ukraine’s general budget revenue rose 3.7% y/y to UAH91.0bn in September after a prior-month decline of 2.6% y/y. General budget expenditures increased 8.5% y/y to UAH116.5bn, slowing from 12.3% y/y growth in August.
Tax revenue rose 5.3% y/y in September, speeding up from 4.2% y/y growth in August. In particular, net VAT surged 85.1% y/y (vs. a 36.1% y/y increase in August), as gross VAT swelled 19.9% y/y (vs. 22.3% y/y in August) and VAT reimbursement declined 4.1% y/y (vs. a 13.6% y/y gain in August). Personal income tax revenue improved 18.8% y/y (vs. a 17.9% y/y climb in August).
At the same time, rental payments for using natural resources dropped 24.8% y/y (vs. a 13.1% y/y fall in August). Enterprise profit tax revenue plummeted 40.0% y/y (vs. a 13.5% y/y increase in August).
Non-tax revenue fell 7.6% y/y in September (after a 39.7% y/y decline in August). The slide was mostly due to a 60.5% y/y plunge in revenue from income from ownership and entrepreneurial activity. At the same time, administrative revenue and payments increased 17.4% y/y (vs. a 10.5% y/y drop in August).
In 9M19, the general budget surplus amounted to UAH10.6bn.
“The switch of the monthly budget balance to a deficit amid increased expenditures is usual in Ukraine. However, we aren't observing any significant improvement in budget collections. Some improvement in tax collection in September was due to a decline in VAT reimbursement to exporters,” Evgeniya Akhtyrko of Concorde Captail said in a note. “We don’t expect the situation with budget revenue to improve noticeably through the year end, and the monthly general budget is likely to be in moderate deficit.”
Ukraine budget revenue rises 10% in 9M19, below plan. Ukraine's 9M19 state budget revenue rose 9.6% y/y to UAH739bn, which is 4.8% below plan, the State Treasury provisionally reported on October 1. Net tax revenue rose 15.8% y/y to UAH331bn (0.3% above plan). Customs revenue declined 3.1% y/y to UAH233bn (11.5% below plan).
Local budgets fiscal revenue improved 17.6% y/y to UAH205bn in 9M19, which is 1.4% above plan. Social payments (pension and other social fund contributions paid by employers) advanced 21.3% y/y to UAH199bn.
In September alone, Ukraine’s state budget revenue increased 1.1% y/y to UAH68bn, which is 7.3% y/y below plan. Net tax receipts advanced 12.7% y/y to UAH28bn, which is 6.5% below plan. In particular, general tax revenue rose 7.1% y/y to UAH40bn, while VAT reimbursement dropped 4.1% y/y to UAH12bn. Customs revenue declined 12.6% y/y to UAH27bn, which is 15.5%
39 UKRAINE Country Report November 2019 www.intellinews.com