Ukraine budget revenue jumps 24% yoy in March

Макроэкономика 04.04.2014 Ukraine’s state collections improved 24.1% yoy to UAH 36.4 bln in March, according to a State Treasury report released on April 3. For 3M14, budget revenue equaled UAH 88.7 bln, which is 5.8% more than the same year-ago period. VAT reimbursement for exporters was reported at UAH 8.9 bln by the end of March, which is 35% (or UAH 4.8 bln) less than a year ago. Alexander Paraschiy: Though we can point to the cut in VAT reimbursement as the main reason for drastic revenue increase, it still does not explain in full the positive result. State revenue rose 7.7% in March, even excluding the VAT reimbursement effect. Unfortunately, detailed data on March budget revenue is not available so far. However, the main suspects driving revenue growth are the continued practice of advance payments, as well as the first results of the new government’s fight against tax evasion. In any case, the most important changes should be evident starting April, when the new budget and anti-crisis regulation was enacted, which included tax hikes on the wealthy. In general, we consider realistic the outlined state revenue target of UAH 372.9 bln (+10.0% yoy). Yet the outcome of jacked up taxes might be new tax evasion schemes.