Ukraine budget deficit surges to UAH 175 bln in December

Ukraine’s general budget deficit surged to 174.7 bln
in December from UAH 6.4 bln in the prior month, the State Treasury reported on
Dec. 25. General budget revenue increased 9.6% yoy to UAH 176.9 bln after surging
32.7% yoy in November. General budget expenditures climbed 20.9% yoy to UAH
350.1 bln, after increasing 32.5% yoy in November.

In 2021, the general budget deficit amounted to UAH
186.9 bln (vs. a deficit of UAH 223.7 bln in 2020).

Tax revenue increased 10% yoy to UAH 158.6 bln in
December, slowing from 37% yoy growth in November. In particular, revenue from
personal income tax increased 21% yoy, royalty payments on the use of natural
resources increased 30% yoy, and VAT on imported goods jumped 40%.

At the same time, enterprise profit tax plummeted 85%
yoy (vs. 83% yoy growth in November), net VAT declined 15% yoy (vs. a 2% yoy
increase in November), as VAT inched up 0.3% yoy, while VAT reimbursement
jumped 20% yoy.

Non-tax revenue climbed up 3.8% yoy to UAH 17.2 bln in
December (after inching up 0.3% yoy in November). In particular, the revenue of
budget-financed entities inched up 0.7% yoy (vs. a 17% yoy decline in
November). At the same time, revenue from ownership and entrepreneurial activity
jumped 22% yoy and administrative payments increased 10% yoy.

Evgeniya Akhtyrko: Expectedly, budget expenditures surged in December, as the government
stuck to the policy of restrained government spending during the previous
months of the year. This policy of last-minute-spending is hard to understand,
as it was clear that budget collections had been booming at least since the
second half of the year. Needless to explain that such a pattern of spending
impedes the planning process of businesses participating in government
procurements, and lowers the overall efficiency of government spending.