Ukraine budget revenue plummets 25% yoy in May

Ukraine’s general budget revenue plummeted 25.3% yoy to
UAH 96.6 bln in May after dropping 9.8% yoy in April, the State Treasury
reported on June 26. General budget expenditures climbed 3.8% yoy to UAH 118.3
bln after growing 6.2% yoy in the prior month. The budget balance switched to a
UAH 21.3 bln surplus from a UAH 6.7 bln deficit in April.

In 5M20, the general budget deficit reached UAH 32.0
bln (vs. a surplus of UAH 33.9 bln in 5M19). Non-tax revenue plummeted 73.9%
yoy to UAH 7.0 bln (after declining 4.4% yoy in April). In particular, income
from ownership and entrepreneurship plunged 94.3% yoy.

Tax revenue fell 12.6% yoy to UAH 89.2 bln in May,
after a 13.7% yoy decline in April. In particular, VAT on imported goods
plunged 30.9% yoy (vs. a 20.6% yoy decline in April). Resource royalty payments
plummeted 38.9% yoy (vs. a 46.1% yoy drop in April). Personal income tax
revenue dropped 5.3% yoy (vs. a 4.3% yoy decline in April). Enterprise profit
tax revenue slid 5.2% yoy (vs. 13.0% yoy growth in April).

Meanwhile, net VAT revenue jumped 11.0% yoy in May
after declining 11.3% yoy in April, as VAT reimbursement declined 7.3% yoy (vs.
1.6% yoy growth in April) while gross VAT revenue slid 1.6% yoy (vs. a 3.9% yoy
drop in April).

Evgeniya Akhtyrko: The decline
in state budget revenue intensified in May amid the growing losses of Ukraine’s
private entrepreneurs caused by quarantine restrictions related to the
coronavirus pandemic. As for tax collections, the situation in May was not much
different from the prior month. The improvement in VAT collections was mostly
due to lower VAT reimbursement to exporters.

We are likely to see a less gloomy picture for
budget collections in June as most businesses were able to renew their activity
amid relaxed quarantine restrictions. Nevertheless, the year-on-year decline in
budget revenue will continue amid the economic downfall.