Ukraine budget revenue jumps 51% yoy in June

Ukraine’s general budget revenue jumped 50.5% yoy to
UAH 153.4 bln in June after dropping 25.3% yoy in May, the State Treasury
reported on July 24. General budget expenditures climbed 7.0% yoy to UAH 122.2
bln after growing 3.8% yoy in the prior month. The budget balance switched to a
UAH 28.6 bln surplus from a UAH 21.3 bln deficit in May.

In 1H20, the general budget deficit amounted to UAH
3.3 bln (vs. a surplus of UAH 21.0 bln in 1H19).

Non-tax revenue doubled yoy to UAH 75.7 bln in June
(after declining 73.9% yoy in May). In particular, income from ownership and
entrepreneurship increased 2.5 times yoy. In addition, the revenue of
budget-financed entities advanced 69.6% yoy. At the same time, administrative
payments and revenue from non-commercial activities declined 16.5% yoy.

Tax revenue inched up 1.0% yoy to UAH 89.2 bln in
June, after a 12.6% yoy decline in May. In particular, net VAT revenue jumped
85.5% yoy (vs. 11.0% yoy growth in May), as VAT reimbursement declined 14.5%
yoy and gross revenue advanced 10.8% yoy. In addition, personal income tax
revenue inched up 0.5% yoy (vs. a 5.3% yoy decline in May).

Meanwhile, resource royalty payments plummeted 60.6%
yoy (vs. a 38.9% yoy drop in May). Enterprise profit tax revenue dropped 73.3%
yoy (vs. 5.2% yoy growth in May).

Evgeniya Akhtyrko: As we expected, the
situation with budget collections improved in June. The significant growth of
income from ownership and entrepreneurship was mostly due to the dividends paid
by state-owned entities. In particular, Naftogaz (NAFTO) payments amounted to
UAH 39.6 bln, while Privatbank transfers to the budget totaled UAH 24.5 bln.

At the moment, the growth of budget expenditures is
moderate, which allows for keeping the budget balance under control. However,
the situation might change in the coming months, as the authorities are likely
to intensify budget-financed projects amid approaching local elections scheduled for Oct. 25.