Ukraine budget revenue rises 4.5% yoy in February

Ukraine’s general budget revenue rose 4.5% yoy to UAH
97.9 bln in February after sliding 1.6% yoy in January, the State Treasury
reported on Mar. 25. General budget expenditures rose 9.5% yoy to UAH 97.7 bln
after increasing 3.0% yoy in the prior month. The general budget balance
switched to a surplus of UAH 0.5 bln from a UAH 3.1 bln deficit in January.

Tax revenue jumped 5.9% yoy in February, after a 2.8%
yoy decline in January. In particular, net VAT revenue advanced 80.3% yoy after
more than doubling in January (gross VAT revenue rose 13.5% yoy, while VAT
reimbursement dropped 17.3% yoy). In addition, personal income tax revenue grew
12.9% yoy (after a 15.9% yoy rise in January). Resource royalty payments surged
63.9% yoy (vs. a 70.7% yoy drop in January). Meanwhile, VAT revenue on imported
goods dropped 12.8% yoy.

Non-tax revenue improved 8.9% yoy, speeding up from
7.3% yoy growth in January. In particular, administrative collections and
payments advanced 30.8% yoy, while collections of budget-financed entities
increased 22.4% yoy. Meanwhile, income from ownership and entrepreneurship
declined 5.6% yoy.

Evgeniya Akhtyrko: These
February fiscal statistics have largely lost their relevance in light of the
inevitable economic consequences of the severe quarantine introduced on Mar. 11
to contain the coronavirus infection.

The lockdown, which has been extended to Apr. 24,
will have an enormously negative impact on public finances. Not only will
fiscal collections plummet because of frozen business activity, but the
government will have to cope with elevated expenditures across various sectors
in order to alleviate the quarantine’s harsh effects on the economy.

Government is currently working on amendments to
the budget, whose deficit will inevitably swell.