Ukraine budget switches to UAH 17 bln surplus in August

Ukraine’s general budget switched to a UAH 17.0 bln
surplus in August from a UAH 28.7 bln deficit in July, the State Treasury
reported on Sept. 25.  Budget revenue jumped 12.8% yoy to UAH 128.9 bln in
August after declining 8.0% yoy in July. General budget expenditures increased
10.5% yoy to UAH 112.2 bln after growing 21.9% yoy in the prior month. In
particular, state budget expenditures advanced 29.7% yoy, while local budget
expenditures declined 20.2% yoy.

In 8M20, the general budget deficit amounted to UAH
15.1 bln (vs. a surplus of UAH 35.4 bln in 8M19).

Tax revenue jumped 10.5% yoy to UAH 114.7 bln in
August, after a 0.8% yoy decline in July. In particular, net VAT revenue surged
71.8% yoy (vs. 29.1% yoy growth in July), as VAT reimbursement fell 24.5% yoy
and gross revenue climbed 17.0% yoy. Personal income tax revenue increased 4.4%
yoy (vs. a 4.2% yoy decline in July). Resource royalty payments advanced 7.6%
yoy (vs. a 38.6% yoy decline in July). Meanwhile, enterprise profit tax
proceeds slid 12.9% yoy (vs. a 9.9% yoy decline in July).

Non-tax revenue surged 35.1% yoy to UAH 13.7 bln in
August (after dropping 50.9% yoy in July). In particular, income from ownership
and entrepreneurship surged 179.8% yoy. In addition, the revenue of
budget-financed entities jumped 31.6% yoy. Administrative payments and revenue
from non-commercial activities declined 16.0% yoy. “Other” non-tax revenue fell
23.6% yoy.

Evgeniya Akhtyrko: The jump in August budget revenue was mostly due to the year-on-year
decline in VAT reimbursement amid weak exports. The budget expenditures were
restrained by lower allocations to the local budgets, while the growth of
central budget expenditures was significant. This disproportion between state
and local budget expenditures has been observed since the end of the previous
year. And this has contributed to the decline in the popularity of the Zelensky
administration at the local levels.