Concorde Capital Research: Budget revenue rises 11% yoy in January

State budget revenue grew 10.8% yoy in January, according to Viktor Pynzenyk, a former Finance Minister and current MP. Advance payments of the enterprise profit tax (which should be paid each month of FY13 in an amount not less than 1/12 of total 2012 payments) were the main reason for that surprising success. Collections from the tax surged 4.3 times yoy, according to Mr. Pynzenyk.

Alexander Paraschiy: State budget revenue increased 10.0% in FY12, only due to double-digit revenue growth in 1H12. But in the last two quarters, the Ukrainian economy sunk deeper into recession (GDP declined 1.3% yoy in 2Q12 and 2.7% yoy in 4Q12). Against this backdrop, the only reason for the growth in tax collection is the revised tax administration rules that kicked in this month that require advance payments of the enterprise profit tax. The effect of this trick will fade away already in February due to high comparison base as February used to be a peak in quarterly profit tax disbursements. By the year’s end, we should not expect the profit tax collection to show any noticeable difference compared to 2012. Overall, we expect budget revenue to grow no more than 5% yoy in 2013, in line with the official target that implies a 4.9% growth.


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