​State budget for the first 10 months of 2018: the most crucial expenses are financed in full

11/8/18

In the period from January till October 2018 that state budget revenues increased by 15.4% compared to the same period of 2017 and reached UAH 747.4 billion.

The revenues from the most critical taxes exceeded the plan for the reporting period. Revenues from the VAT on imported goods increased by UAH 39.1 billion, revenues from the corporate profit tax increased by UAH 26.2 billion, revenues from the VAT on manufactured goods (taking into account VAT refund from the state budget) increased by UAH 13.8 billion, revenues from the personal income tax and from the excise tax increased by UAH 13.4 billion and UAH 7.3 billion respectively.
State budget allocations in the period from January till October 2018 were fulfilled by 99.7%.

The main reasons for underperformance in the state budget revenues (UAH 2.4 billion) refer to lower dividends on state-owned shares (UAH 9.7 billion), revenues from the excise tax (UAH 6 billion), revenues to be transferred by the National Bank (UAH 5.9 billion), revenues from the sale of seized goods (UAH 4.5 billion), revenues from the VAT on imported goods (UAH 0.7 billion), rent fee for the use of sub-soil resources (UAH 3.2 billion) and revenues from the import duties (UAH 1.2 billion). At the same time, overperformance was achieved in regard to the public bodies’ own revenues (UAH 14.2 billion), revenues from the corporate profit tax (UAH 13.1 billion), revenues from the VAT on manufactured goods (taking into account VAT refund from the state budget) (UAH 0.4 billion) and the revenues from the personal income tax (UAH 1 billion).

The revenues of the general fund of the state budget in January-October 2018 were equal to UAH 673.2 billion, which is UAH 105.1 billion (18.5%) higher compared to the same period of 2017.

The biggest contributors to the general fund of the state budget in January-October 2018 were the VAT on manufactured goods (taking into account VAT refund from the state budget) (UAH 66.7 billion, which is UAH 13.8 billion or 26.1% higher compared to the same period of 2017), VAT on imported goods (UAH 239.6 billion, which is UAH 39.1 billion or 19.5% higher compared to the same period of 2017), corporate profit tax (UAH 75.6 billion, which is UAH 26 billion or 52.4% higher compared to the same period of 2017) and personal income tax (UAH 73.5 billion, which is UAH 13.4 billion or 22.3% higher compared to the same period of 2017).

At the same time, there was a reduction in revenues from the excise tax (by UAH 8.1 billion or 10.5%, which is due to higher transfers to the special fund of revenues from the tax on petroleum products and vehicles) as well as from the rent fee for the use of sub-soil resources (by UAH 6.9 billion or 18.5%). The VAT refund increased by UAH 10.7 billion (11%) reaching UAH 108 billion. Hence, the revenue situation of the state budget is improving.

Budget lines which are most crucial for the state were financed in full. The spending was focused on social programs, defence, security and public debt service.
Compared to the same period of 2017, the state budget revenues in January-October 2018 increased by 16.3% to UAH 751.8 billion, including the revenues of the general fund of the budget which increased by 15.1% to UAH 687.8 billion. At the same time, the costs of serving the public debt went down by 8.3% (UAH 8.3 billion).
Compared to January-Octiber 2017, the expenses of the general fund of the state budget for salaries (gross) increased by UAH 30.9 billion (30%) and reached UAH

133.8 billion, social funding increased by UAH 21.8 billion (19.7%) and reached UAH 132 billion.

Transfers to the Pension Fund in January-October 2018 amounted UAH 118.8 billion. This is 21.1% (UAH 20.7 billion) higher compared to January-October 2017. This budget allocation was fulfilled by 100%.

Transfers from the state budget to the local budgets amounted UAH 246.5 billion and included social welfare subventions equal to UAH 106.7 billion (UAH 2.3 billion or 2.2% higher compared to the same period of 2017), education subventions equal to UAH 50.2 billion (UAH 7.6 billion or 17.8% higher compared to the same period of 2017) and healthcare subventions equal to UAH 49.9 billion (UAH 4.1 billion or 8.9% higher compared to the same period of 2017).

The state budget deficit is kept within the planned annual limits.

The state budget deficit in January-October 2018 amounted UAH 4.8 billion compared to the limit of UAH 80.6 billion set by the Law on the State Budget.

The deficit of the general fund of the state budget in the reported period amounted UAH 10.5 billion compared to UAH 57.4 billion planned for this period.

Also, the negotiations with the IMF sent a positive signal to international investors and contributed to Ukraine’s successful performance on the international capital market.

In January-October 2018, Ukraine took external loans amounting UAH 19.4 billion (USD 725 million) to cover it budget deficit.

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