Page 40 - UKRRptSept23

Currently, the state survives thanks to the financial support of its partners, as well as grants and loans. "Ukraine lost about 30% of its economy, enterprises, and 3.5 million jobs. In the first year of the war, we lost 29.5% of our GDP. This is less than expected, though. However, business has adapted and continues to adapt. This year, we expect even a slight increase compared to last year," the head of government added.
6.1.1 Budget dynamics - results
Outgoing Ukrainian Defense Minister Oleksiy Reznikov has revealed that Russia’s ongoing full-scale invasion and war is costing Ukraine a staggering $100 million every day.
Ukraine's state budget deficit increased to almost UAH 131B in August.The state budget deficit in August 2023 amounted to UAH 130.7B, compared to UAH 107.6B in July, the Ministry of Finance reported. It is noted that cash expenditures in the state budget increased significantly in August to UAH 310B after a decline in July to UAH 282.6B. At the same time, last month's receipts to the state budget's general fund decreased from UAH 136.7B in July to UAH 124.7B in August. This is because there was no US grant-in-aid this month, whereas previously, the US provided about UAH 45B monthly. For the first eight months of the year, cash expenditures reached about UAH 2.4T. State budget revenues during this period amounted to UAH 1.7T, of which UAH 317.2B was international grant aid. The US alone provided UAH 310.8B. The state's budget for January-August has a total deficit of UAH 714.6B.
The Ukrainian agricultural sector risks losing $3-4B annually due to insufficient export volumes. Currently, Ukraine exports about three million tons of grain per month. If this indicator is not increased to 5.5-6 million tons, the domestic agricultural sector may lose $3-4B per year, the Parliamentary Committee on Agricultural Policy calculated. According to committee representative Dmytro Solomchuk, the harvest is expected to be larger than forecast at 75 million tons. Given these figures and domestic consumption, it is necessary to export at least 5.5-6 million tons of grain per month so that no surpluses will be transferred to the next harvest. Solomchuk added that if exports are not increased, it will be difficult for farmers to pay rent for farmland and purchase seeds and fertilizers for next year due to their losses. "This can lead to a decrease in the quality of crops and a smaller harvest in the next season," he added.
The processing industry has become the leading budget contributor. Through the first seven months of the year, the industry paid 17.1% of taxes and fees collected from enterprises across all sectors, the Tax Service reported. Also, processing companies showed the highest increase in tax deductions, by 50% or UAH 40.3B, in January-July 2022. In second place in terms of the share of tax deductions to the budget is wholesale and retail trade; repair of motor vehicles and motorcycles with 16.5%. Then there is public administration and defense, mandatory social insurance with 14%. However, as noted by the Tax Committee, the gambling industry failed to pay UAH 7B in 2022 taxes. Most gambling operators have emerged from the shadows and pay taxes. "But we must intensify pressure on the industry and constantly monitor their activities for compliance with the law and force them to pay the money owed for 2022," said the head of the committee, Danylo
40 UKRAINE Country Report September 2023 www.intellinews.com