Ukraine budget revenue surges 27% yoy in August

Ukraine’s general budget revenue reached UAH 76.2 bln in August, which is a 26.6% increase yoy, according to a Sept. 27 State Treasury report. This contrasts with 6.3% yoy revenue decline in the prior month. Revenue was driven by almost quadrupled enterprise profit tax collections (UAH 10.4 bln vs. UAH 2.6 bln a year ago) and a 53.5% yoy increase in excise duty revenues and 42.9% yoy growth in personal income tax. Remarkably, the result was achieved amid still no support from the National Bank (compared to UAH 7.0 bln a year ago) and a substantial increase in VAT reimbursement (UAH 6.2 bln vs. UAH 4.5 bln a year ago). In 8M16, general budget revenue grew 13.0% yoy to UAH 465.3 bln.

Budget spending increased 36.6% yoy (to UAH 64.9 bln) in August from 20.3% yoy (to UAH 60.2 bln) in July. Accelerated collections translated into UAH 11.6 bln in general budget surplus in August. The central budget surplus was UAH 7.0 bln and the local budget surplus was UAH 4.6 bln.

Still for 8M16, a general budget deficit was UAH 11.3 bln, which includes UAH 42.9 bln in the central budget deficit and UAH 31.6 bln in the surplus of local budgets.

Alexander Paraschiy: The August result confirms our view on good fiscal prospects this year. Even without NBU dividends, general budget revenue grew 13.0% yoy against the targeted 14.1% yoy in average revenue growth for the year.  Given that the economy is gradually reviving, we do not see any substantial risks for budget collections in the upcoming months. We expect budget revenue will grow near 14% yoy easily by the year end, provided the National Bank Council, which has yet to be formed, approves a UAH 38 bln payment of NBU profits to the budget. Thus far, the initially outlined deficit target of 3.7% of GDP looks safe.