Ukraine budget revenue rises 15% in 5M19, below plan

Ukraine’s 5M19 state budget revenue rose 15.4% yoy to
UAH 427 bln, which is 2.0% below plan, the State Treasury provisionally
reported on June 3. Net tax revenue increased 4.8% yoy to UAH 172 bln (7.9%
below plan). Customs revenue increased 2.2% yoy to UAH 128 bln (9.4% below
plan). Meanwhile, special fund revenue jumped 55.8% yoy to UAH 50 bln.

In May alone, Ukraine’s state budget revenue rose 7.5%
yoy to UAH 104 bln, which is 8.5% yoy above plan. Net tax receipts increased
9.8% yoy to UAH 47 bln, which is 9.6% below plan. In particular, general tax
revenue climbed 11.0% yoy to UAH 60 bln, while VAT reimbursement increased
15.5% yoy to UAH 13 bln. Customs revenue gained 3.3% yoy to UAH 27 bln, which
is 6.6% below plan.

Local budgets fiscal revenue improved 18.3% yoy to UAH
111 bln in 5M19, which is 2.1% above plan. Social payments (pension and other
social fund contributions paid by employers) advanced 23.1% yoy to UAH 107 bln.

Evgeniya Akhtyrko: Net tax
revenue improved in May, showing year-on-year growth. Apparently, significant advancement in industrial growth contributed
to better tax collection and positive net tax revenue results, even amid high
VAT reimbursement to exporters. Nevertheless, due to the poor results of the
first four months of the year and chronic customs underperformance, regular
budget collections remain below plan.

We expect the situation with budget collections to
improve in the nearest months. On the one hand, improved industrial performance
should help to boost tax collections. On the other hand, cooling exports should
result in slower growth of VAT reimbursement, while weakening of local currency
will allow to increase customs revenue.