Ukraine budget revenue plummets 25% yoy in May
Ukraine’s general budget revenue plummeted 25.3% yoy to UAH 96.6 bln in May after dropping 9.8% yoy in April, the State Treasury reported on June 26. General budget expenditures climbed 3.8% yoy to UAH 118.3 bln after growing 6.2% yoy in the prior month. The budget balance switched to a UAH 21.3 bln surplus from a UAH 6.7 bln deficit in April.
In 5M20, the general budget deficit reached UAH 32.0 bln (vs. a surplus of UAH 33.9 bln in 5M19). Non-tax revenue plummeted 73.9% yoy to UAH 7.0 bln (after declining 4.4% yoy in April). In particular, income from ownership and entrepreneurship plunged 94.3% yoy.
Tax revenue fell 12.6% yoy to UAH 89.2 bln in May, after a 13.7% yoy decline in April. In particular, VAT on imported goods plunged 30.9% yoy (vs. a 20.6% yoy decline in April). Resource royalty payments plummeted 38.9% yoy (vs. a 46.1% yoy drop in April). Personal income tax revenue dropped 5.3% yoy (vs. a 4.3% yoy decline in April). Enterprise profit tax revenue slid 5.2% yoy (vs. 13.0% yoy growth in April).
Meanwhile, net VAT revenue jumped 11.0% yoy in May after declining 11.3% yoy in April, as VAT reimbursement declined 7.3% yoy (vs. 1.6% yoy growth in April) while gross VAT revenue slid 1.6% yoy (vs. a 3.9% yoy drop in April).
Evgeniya Akhtyrko: The decline in state budget revenue intensified in May amid the growing losses of Ukraine’s private entrepreneurs caused by quarantine restrictions related to the coronavirus pandemic. As for tax collections, the situation in May was not much different from the prior month. The improvement in VAT collections was mostly due to lower VAT reimbursement to exporters.
We are likely to see a less gloomy picture for budget collections in June as most businesses were able to renew their activity amid relaxed quarantine restrictions. Nevertheless, the year-on-year decline in budget revenue will continue amid the economic downfall.