Page 43 - UKRRptSept21

Ukraine’s general budget deficit narrowed to UAH3.8bn in July from UAH9.8bn in the prior month, the State Treasury reported on August 26. General budget revenue surged 26.4% y/y to UAH118.4bn after sliding 6.4% y/y in June. General budget expenditures inched up 1.0% y/y to UAH121.8bn, slowing from 24.5% y/y growth in June.
In 7M21, the general budget deficit amounted to UAH18.4bn (vs. a deficit of UAH32.1bn in 7M20).
Tax revenue jumped 27.5% y/y to UAH108.9bn in July, slowing from 37.9% y/y growth in June. Net VAT revenue increased 29.1% y/y (vs. a 26.3% y/y increase in June), as gross VAT revenue increased 25.8% y/y and VAT reimbursement increased 22.1% y/y. The revenue from personal income tax increased 21.0% y/y (vs. 29.1% y/y growth in June). In addition, enterprise profit tax and royalty payments on the use of natural resources jumped more than two-fold year-on-year.
Non-tax revenue increased 20.2% y/y to UAH9.1bn in July (after declining 50.2% y/y in June). In particular, the revenue of budget-financed entities increased 40.8% y/y; administrative payments advanced 19.7% y/y. Meanwhile, revenue from ownership and entrepreneurship dropped 56.5% y/y.
6.1.2 Budget dynamics - specific issues...
6.1.3 Budget dynamics - funding
In the first year since gambling was legalized, the industry brought $37mn to the state budget, the Gambling and Lottery Regulation Commission reported Tuesday. This is one quarter the amount forecast one year ago. The gambling industry has been slow to expand due to delays in adopting regulations and some of the highest taxes in the world. It costs up to $2mn to open a casino in a 150-room hotel.
Ukraine received $2.7bn from the International Monetary Fund (IMF) on August 23. The announcement came after a talk between President of Ukraine Volodymyr Zelenskiy and IMF managing director Kristalina Georgieva, president.gov.ua reported on August 3. The funds are part of a $650bn release by the IMF to restart the world economy as the COVID pandemic continues.
Zelenskiy noted that the Ukrainian government is still working closely with the IMF and that he expects the IMF mission in September.
The $2.7bn should give the Ukrainian government breathing room while it sorts out both relations with the IMF and its own 2022 budget. By taking the edge off the budget desperation in the government, it might be easier to come to an agreement. However, this amount is not enough (and is only once) to let the government convince itself that the IMF is no longer needed, so the reception of the IMF mission’s visit might be as cordial as possible.
What IMF assistance will be used for. According to Prime Minister Denys Shmyhal , the $2.7bn in non-refundable financial assistance received from the
43 UKRAINE Country Report September 2021 www.intellinews.com