Ukraine budget revenue surges 41% yoy in May

Ukraine’s general budget revenue surged 40.7% yoy in May
from a 3.6% yoy decline in the prior month, owing mostly to a surge in non-tax
revenue, the State Treasury reported on June 26. Tax revenue grew 27.8% yoy
while non-tax revenue doubled, mostly due to UAH 17 bln in dividends paid by
the National Bank of Ukraine.

Receipts from the enterprise profit tax swelled 44%
yoy after a 23% yoy decline in April. In addition, rental payments for the use
of natural resources nearly doubled yoy vs. 8% yoy growth in the previous
month.

Strong growth in net VAT receipts continued, reaching
41% yoy in May. Meanwhile, receipts from excise taxes continued to decrease,
reaching 4% yoy.

A general budget surplus of UAH 13.6 bln was reported
in May as a consequence of higher revenue despite a 43.4% yoy surge in budget
expenditures. For 5M18, general budget revenue increased 14.5% yoy, while the
general budget posted a surplus of UAH 13.7 bln.

Evgeniya Akhtyrko: May’s
idyllic budget performance and general budget surplus should not be taken at
face value. Uneven month-to-month receipts from the enterprise profit tax and
rental payments point to the practice of “manual” tax collection instead of an
automatic regime. The continuing decline in excise tax receipts is another
point of concern.

We expect public spending to intensify
significantly in the coming months as part of attempts by President Poroshenko
to improve his popularity ahead of the March 2019 presidential elections.