Ukraine budget revenue grows 19% yoy in July

Ukraine’s general budget revenue increased 19.1% yoy
to UAH 84.7 bln in July, accelerating from 14.1% yoy growth in the prior month,
owing to rising tax revenue, the State Treasury reported on Aug. 27. Meanwhile,
budget expenditures improved 24% yoy to UAH 86.8 bln in July, accelerating from
21.1% yoy growth in June. The general budget deficit amounted to UAH 2.1 bln in
July (vs. a UAH 3.3 bln deficit in June).

Tax revenue jumped 28.4%, accelerating from 17.1% yoy
growth in June. In particular, net VAT receipts swelled 88%. Receipts from
enterprise profit tax picked up 13% yoy after a 46% yoy decline in June. The
growth of excise taxes for domestic goods accelerated 23% yoy from a 13% yoy
growth in the previous month. Strong growth of personal income tax continued as
well, reaching 25% yoy in July.

Meanwhile, non-tax revenue declined 27.5% yoy after
7.7% yoy growth in the previous month. In particular, income from ownership and
entrepreneurship plummeted 78% yoy.

In 7M18, the general budget posted a surplus of UAH
8.2 bln amid revenue growth of 15.0% yoy and an expenditure surge of 25.3% yoy.
General budget revenue has already met 61% of the 2018 plan in 7M18, while the
expenditures are at 50%.

Evgeniya Akhtyrko: The general
budget is in a deficit for the second month in a row amid fast growing
expenditures. Meanwhile, revenue flows remain very uneven. Some improvement in
tax collection was offset by essential declines in non-tax revenue. A
significant drop in income from ownership and entrepreneurship point to the
weak position of small and medium business in Ukraine.

It will get risky economically to maintain this
high pace of budget expenditures amid shaky revenue. In 7M18, the general
budget balance seems to have been in satisfactory shape, but growing public
spending – particularly ahead of elections – could harm fiscal stability
quickly.