Ukraine budget revenue rises 9% in 10M19, below plan

Ukraine’s 10M19 state budget revenue rose 8.5% yoy to
UAH 811 bln, which is 5.5% below plan, the State Treasury provisionally
reported on Nov. 1. Net tax revenue rose 14.9% yoy to UAH 359 bln (0.4% below
plan). Customs revenue declined 4.6% yoy to UAH 263 bln (12.1% below plan).

Local budgets fiscal revenue improved 17.2% yoy to UAH
230 bln in 10M19, which is 1.6% above plan. Social payments (pension and other
social fund contributions paid by employers) advanced 20.9% yoy to UAH 222 bln.

In October alone, Ukraine’s state budget revenue
dropped 2.3% yoy to UAH 71 bln, which is 9.9% yoy below plan. Net tax receipts
advanced 5.0% yoy to UAH 28 bln, which is 8.0% below plan. In particular,
general tax revenue rose 11.6% yoy to UAH 41 bln, while VAT reimbursement
surged 28.7% yoy to UAH 13 bln. Customs revenue declined 14.7% yoy to UAH 30
bln, which is 16.1% below plan.

Evgeniya Akhtyrko: The
situation with budget collections worsened in October compared with September. Higher VAT
reimbursement resulted in a drop in net tax revenue, while the situation with
customs revenue continues to deteriorate.

We don’t expect the situation with tax collections
to improve noticeably though the year end. This means that the government is
likely to cut its planned budget expenditures in 4Q19 in order to avoid the
budget deficit going beyond the planned benchmark of 2.3% of GDP.