Ukraine central budget underperforms by 8% in 2014

Ukraine central budget underperforms by 8% in 2014



6 січня 2015 года
Конкорд Капитал

Ukraine’s state budget revenue collections grew 7.2% yoy in 2014, compared to the 11.4% yoy growth target, the State Treasury reported on Jan. 5. The revenue shortfall was UAH 36.3 bln, or 8.2%, the Treasury reported. The result was embellished by low VAT reimbursements as authorities refunded UAH 43.3 bln in VAT, which was only 84% of their plan.



Alexander Paraschiy: The poor result in state collections was quite predictable, though we anticipated even weaker growth at 5% yoy. The EUR 500 mln in support from the European Commission received on Dec. 3, as well as delayed VAT refunding, helped the authorities to balloon collections in the last month, though they were still much below Finance Ministry targets.



This outcome should serve as a warning signal for the 2015 budget. The outlined UAH 475.3 bln revenue target implies 30.7% yoy growth in collections (+UAH 111.6 bln), which is overly optimistic even if tax rates increase.



Against the backdrop of the current economic hardship, we believe state collections growth won’t exceed 10-15% yoy. In this context, we can already predict at least a UAH 30 bln state collections shortfall from the 2015 budget plan, which does not look like a sound fiscal plan going into IMF negotiations.

Источник: Конкорд Капитал

Аналитик: Александр Паращий
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