Ukraine budget revenue drops 3% yoy in August

Ukraine’s general budget revenue dropped 2.6% yoy to
UAH 114.2 bln in August after a prior-month advance of 20.4% yoy, the State
Treasury reported on Sept. 26. General budget expenditures increased 12.3% yoy
to UAH 101.5 bln, slowing from 13.9% yoy growth in July. General budget surplus
amounted to UAH 12.7 bln, swelling from the surplus of UAH 3.0 bln in July.

Tax revenue rose 4.2% yoy in August, slowing from
12.9% yoy growth in July. Rental payments for using natural resources declined
13.1% yoy (vs. a 6.1 yoy fall in July). In addition, excise tax revenue
declined 7.8% yoy in August (vs. a 9.6% yoy slide in July). Net VAT revenue
jumped 36.1% yoy after a 51.8% yoy surge in July. In particular, gross VAT
revenue improved 22.3% yoy while VAT reimbursement gained 13.6% yoy. Personal
income tax revenue rose to 17.9% yoy (vs. a 27.0% yoy climb in July). In
addition, the enterprise profit tax advanced 13.5% yoy (vs. a 53.1% yoy drop in
July).

Non-tax revenue declined 39.7% yoy in August (vs. an
89.7% yoy surge in July). The decline was mostly due to a 85.6% yoy plunge in
revenue from income from ownership and entrepreneurial activity (vs. almost
six-time yoy growth in July).

In 8M19, the general budget surplus amounted to UAH
36.1 bln.

Evgeniya Akhtyrko: The decline
in August’s budget revenue was mostly caused by a high comparative base in
revenue from income from ownership and entrepreneurial activity last year.
Nevertheless, tax revenue growth was quite weak due to a continuing decline in
rent payments and excise duty revenue. The moderate growth of budget
expenditures enabled keeping the budget balance in surplus.

We expect the government to keep budget expenditures
in moderation in order to avoid a further swelling budget deficit amid bumpy
collections.