Ukraine 11M18 budget revenue rises 16% yoy, below plan

Ukraine’s 11M18 state budget revenue rose 16.4% yoy to
UAH 843 bln, which is 1.9% below plan, the State Treasury provisionally
reported on Dec. 3. Net tax revenue climbed 18.0% yoy to UAH 358 bln (0.6%
below plan), while customs revenue rose 13.0% yoy to UAH 309 bln (as planned).
Other budget revenue surged almost three times yoy to UAH 92 bln (6.2% below
plan).

In November alone, net tax revenue surged 27.8% yoy
(vs. 25.0% yoy growth in October) to UAH 45.2 bln, which is 6.5% below plan.
Customs revenue increased 11.6% yoy to UAH 33.6 bln, which is 0.1% below plan.
Other budget revenue in November rose 39.3% yoy to UAH 9.5 bln, which exceeds
plan by four times. November state budget revenue of UAH 95.7 bln (24.3% yoy
growth) was 2.5% above plan.

Local budgets’ 11M18 revenue increased 16.2% yoy to
UAH 222 bln, outperforming plan by 2.3%. Social payments (personal income tax
and pension fund contributions paid by employers) jumped 26.8% yoy to UAH 204 bln.

Evgeniya Akhtyrko: The 11M
state budget revenue results imply that the 2018 state budget is likely to
slightly underperform on the revenue side. As we expected, the
government has been trying to compensate underpaid transfers from the central
bank – which has its own budgeting process – to the budget by boosted
collections of tax and customs revenue. However, this method is likely to
involve additional (and not always justified) pressure on business in the
country.

Should the 2018 state budget revenue be lower than
expected, the government is likely to cut budget expenditures in order to
prevent the budget deficit from exceeding 2.5% of GDP, which could upset the
IMF.