Ukraine budget revenue rises 3.3% yoy in 9M20

Ukraine’s state budget revenue rose 3.3% yoy to UAH
765 bln in 9M20, which is 1.5% below plan, the State Treasury provisionally reported
on Oct. 1. Net tax revenue jumped 17.0% yoy to UAH 387 bln (7.3% above plan)
amid 9.6% yoy growth in gross tax revenue and a 11.2% yoy fall in VAT
reimbursement. Customs revenue plummeted 12.1% yoy to UAH 205 bln (14.0% below
plan).

Local budgets’ fiscal revenue improved 3.3% yoy to UAH
212 bln in 9M20, which is 5.8% below plan. Social payments (pension and other
social fund contributions paid by employers) advanced 5.6% yoy to UAH 210 bln.

In September alone, state budget revenue increased 11.5%
yoy to UAH 76 bln, which is 15.3% above plan. Net tax revenue jumped 13.1% to
32 bln (36.9% above plan) amid 8.1% yoy growth in gross tax revenue and a 3.8%
yoy slide in VAT reimbursement. Customs revenue advanced 6.5% yoy to UAH
26.9bln (1.1% above plan).

Evgeniya Akhtyrko: Budget
revenue continues to pick up fast. According to some anecdotal evidence, the
growth of VAT revenue amid the falling economy is the result of government
efforts fighting pervasive corruption schemes with VAT reimbursement (the
so-called “skrutka”).

We will continue to observe this trend in order to
determine its legitimacy. In any case, this would be a sporadic effort that can
bring only a one-off effect. Quality improvement in public finances calls for a
systemic anti-corruption program, which is definitely not in the Zelensky
administration’s current agenda.