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

4 November 2019

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.