In 2023, the general fund of the Ukrainian budget received UAH 1,663.1 billion in revenues, including UAH 1,098.5 billion in tax revenues and UAH 122.8 billion in non-tax revenues.

This is stated in the monthly Budget Barometer from the Center of Public Finance and Governance of the Kyiv School of Economics (KSE) for December 2023.

In December, revenues from taxes, fees, and mandatory payments to the state budget’s general fund amounted to UAH 127.1 billion. The budget revenues were under-executed by 10.6% despite receiving UAH 20.5 billion in unplanned grants. 

In addition, the government planned to collect UAH 117.3 billion in major taxes (for the general fund) but actually received UAH 17.8 billion less. This is primarily due to lower revenues from rent for the use of subsoil (-80.3%), “import” VAT (-17.9%), and personal income tax (-15.4%).

At the same time, actual corporate income tax revenues exceeded expectations by almost three times, reaching UAH 4.1 billion. The main reasons are the high profits of state-owned banks and some state-owned enterprises. Overall, the annual revenues from this tax were exceeded by one-third. 

In addition, revenues from import and export duties (+18.5%), excise tax (+5.1%), and domestic VAT (+2.7%) were also over-executed.

Total unified social contribution revenues in 2023 increased by 12.4% or by UAH 52.8 billion compared to 2022 and amounted to UAH 478.1 billion. Similarly, the Pension Fund’s revenues increased by 25.3% or by UAH 156.9 billion compared to 2022 UAH 777.3 billion.

For the whole of 2023, the cash expenditures of the state budget amounted to more than UAH 4 trillion, including UAH 3.03 trillion or 98% of the annual plan. 

Overall, last year’s state budget was executed with a deficit of UAH 1.33 trillion, including UAH 1.36 trillion for the general fund, which is 1.3 times less than the plan of UAH 1.83 trillion. This figure was achieved due to the attraction of international financial assistance through grants – UAH 424.8 billion.

The main risks that threaten the macro-financial stability of the state in 2024, according to experts of the KSE Center for Public Finance Analysis, include:

• Lower customs revenues due to the repeated blocking of the Ukrainian-Polish border by Polish carriers.

• Uncertainty about budget support from the US and the EU.

• Lower tax and customs revenues due to a possible decline in business activity.

The December 2023 budget execution analysis by the KSE Center for Public Finance is available in Ukrainian and English.