Budget revenue growth slows to 4.0% yoy in February

State budget revenue increased 5.1% yoy in 2M13, the State Treasury reported on March 4. In February alone, state collections rose 4.0% yoy, a noticeable slowdown vs. 6.9% yoy growth a month ago.

Alexander Paraschiy: We assume that changes in administering the enterprise profit tax are the key factor of the revenue slowdown in February. A year before, peak payments of profit tax occurred in the middle of each quarter (including February), while they’ve smoothened out this year. Starting January 2013, companies have been obliged to disburse 1/12 of their average tax from last year. These payments caused a surge in January revenue and predictably (due to a high comparison base) subdued February collections. In this respect, we might see a minor bump up in March revenue but we expect single-digit growth (hovering near the 5% level) in the upcoming months.