Business news from Ukraine


The state budget of Ukraine for the first four months of 2022 was executed with a deficit of UAH 146.6 billion, including the general fund with a deficit of UAH 157.2 billion, with a planned deficit for this period of UAH 317.1 billion, such preliminary results The Treasury Department announced on Monday.

Taking into account its data on the results of three months, in April the deficit of the general fund of the state budget amounted to UAH 89.7 billion compared to UAH 80.6 billion in March, while in February and January there were surpluses of UAH 1.1 billion and UAH 12 billion, respectively. UAH



On February 24, 2022, the National Bank of Ukraine (NBU) transferred part of the profit before distribution in the amount of UAH 19 billion to the state budget of Ukraine to financially support the functioning of the state under martial law, according to the website of the central bank.
“The National Bank promptly transferred part of the profit before distribution at the end of 2021 to the state budget of Ukraine. This amount is UAH 19 billion. This is a step that our state, its Armed Forces and every Ukrainian needs,” Governor of the NBU Kyrylo Shevchenko said.
The decision to transfer part of the profits was made by the Board of the National Bank of Ukraine on February 24, 2022.
As reported, the National Bank opened a special multi-currency account to raise funds for the needs of the Ukrainian army in connection with the introduction of martial law in Ukraine, the armed aggression of the Russian Federation and the danger to the state independence of Ukraine, its territorial integrity.



The State Service of Geology and Subsoil of Ukraine increased revenues to the state budget for the provided special permits and geological information by 1.6 times (by UAH 597 million) in 2021 compared to 2020, to UAH 1.58 billion, head of the service Roman Opimakh has said.
“We have all the prerequisites that 2022 will not be worse,” he said at a press conference in Kyiv on Wednesday.
According to him, in particular, revenues to the state budget from licenses sold at electronic auctions increased by 14.7% (by UAH 118 million) in 2021 compared to 2020, to UAH 923 million. The number of special permits sold through e-auction increased by 3.8 times (by 118), to 160.
In general, last year the service issued 377 new licenses, which is 2.8 times more than in 2020 (136). Every third of them was issued for the raw materials used in the construction, the most popular were special permits for amber, and the most expensive lots traditionally were hydrocarbon sites.
Opimakh clarified that in 2021, the State Geology Service granted special permits for the development of over 50,000 square meters of hydrocarbon areas. The main recipients were the companies of Naftogaz Group, in particular, the first gas produced at Yuzivska area is expected as early as 2022.
In addition, the Service prepared 35 facilities for investors in the development of strategic raw materials, which are used in the defense industry, aircraft manufacturing and the “green transition.”
“A list of strategic minerals has finally been approved, which includes 37 elements. An atlas of strategic minerals has also been submitted, a list of over 200 potential sites has been compiled, which we expect to be approved in 2022 and to be open for auctions or signing of agreements on production section, an interactive map of such special permits, deposits and ore occurrences was compiled – more than 900 objects,” Opimakh said.
At the same time, he recalled that Ukraine still has limited access to geological information on the reserves of strategic raw materials. “The Ministry of Natural Resources worked hard on this last year, I hope that the work will end with the removal of this stamp,” the head of the State Service of Geology and Subsoil said.
Opimakh also recalled that in 2021, the largest number of special permits in recent times, 315, was revoked. The key grounds for revocation were court decisions (73%), voluntary refusal (10%) and decisions of the National Security and Defense Council (9%). In terms of minerals: construction materials and groundwater – 31% each, coal – 23%, hydrocarbons – 12%, and metal ores – 2%.
The key grounds for revocation are the following: subsoil use has not been started for two years, there are no documents for land for subsoil use, the absence of a mining allotment certificate, non-admission to the facility for inspections, failure to comply with the requirements of design documents or their absence.
In addition, the Service took an active part in the fight against illegal mining, the bulk of which is associated with sand. In particular, the possibility of prompt verification of the legality of mining through a smartphone has been created.
“Together with the State Geological Information Fund, we have prepared an excellent product that will make it easier for the police and the public to check for a special permit at the operational level. If you see, perhaps, illegal mining, then you can see if there is a special permit and whether it is valid,” he explained.
The service’s materials also clarified that in 2021, subsoil users paid UAH 51.5 billion in royalty payments.

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The poor work of government agencies leads to an annual budget shortfall of about UAH 9 billion from the sale of alcoholic beverages, competent agencies in 2019-2020 and over nine months of 2021 also did not provide an effective system of control over production and circulation of alcohol and administration of the excise tax.
These results were announced by auditors of the Accounting Chamber following an audit of the planning efficiency and control over the completeness and timeliness of a receipt of the excise tax on alcoholic beverages to the state budget on the department’s website on Tuesday.
“According to the World Health Organization, the share of illegal alcohol in Ukraine is more than a third of the total alcohol market and more than half of the strong alcohol market. Taxation of illegally produced and imported alcoholic beverages only can replenish the state budget from the excise tax by about UAH 9 billion a year,” the chamber says in a report.
The Accounting Chamber refers to the data of the State Tax Service, according to which production of alcoholic beverages in 2020 increased compared to 2019 by 11%, wine – decreased by 13%, and beer – by 0.5%. At the same time, according to the State Customs Service, imports of alcoholic beverages increased by almost 45%, wine – by half, and beer – by 11%.
At the same time, in 2020, the state budget received a total of UAH 42 billion of the excise tax on imported and produced in Ukraine alcoholic beverages, however, despite the increase in imports, the share of this tax in the total amount of tax revenues decreased from 1.9% in 2018 to 1.6% over nine months of 2021.
“The State Fiscal Service, the State Tax Service and the State Customs Service did not ensure proper intersectoral coordination on administration of the excise tax on alcoholic beverages, effective control of their production and circulation. This created the preconditions for illegal production and circulation of these products and, as a consequence, for the non-receipt of this tax in the state budget,” the chamber says in the report.
In addition, due to the poor work of the Ministry of Finance and the State Fiscal Service, the automated control system Electronic Excise Stamp has not been fully implemented, since the corresponding changes have not yet been made to the Tax Code and other legislative acts. The Accounting Chamber clarified that due to the software imperfection of the system for monitoring excise tax stamps, the State Customs Service inspectors still monitor circulation of excise stamps at customs posts mainly in paper, not electronic form.
The department recalled that in 2020 the State Customs Service did not plan and did not conduct documentary field checks, since the Ministry of Finance untimely approved the planning procedure by the customs authorities. At the same time, over nine months of 2021, the State Customs Service authorities conducted only two documentary checks of exporters of alcoholic beverages, as a result of which they additionally charged UAH 2.6 million in taxes (of which 0.8% was paid to the budget).
The auditors indicated in the report that the control by the State Fiscal Service bodies over the illegal movement of alcohol and alcoholic beverages was ineffective. During the study period (2019-2020 and nine months of 2021), customs officers seized more than 158,000 liters of alcohol, over 25,000 liters of alcoholic beverages and over 2 million stamps of excise tax, however, almost 74% of the seized alcohol was returned to the owners by a court ruling. According to the Accounting Chamber, this testifies to the groundlessness of separate decisions of the customs authorities, as well as the ineffectiveness of spending funds from the state budget to pay court fees in these cases.
“Based on the results of the audit, the Accounting Chamber recommended the government to improve legislation on administration of the excise tax. In particular, to speed up the implementation of the Electronic Excise Stamp full automated system of control over circulation of alcoholic beverages and tobacco products, to improve the licensing of activities in this area, and to streamline the trade in alcoholic beverages through the Internet,” the organization says.

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The deficit of the Ukrainian state budget amounted to 1.4% of GDP in January-November, while 5.5% of GDP was projected in the law on the state budget, Prime Minister Denys Shmyhal said.
“Thanks to the balanced fiscal and debt policy, the state budget deficit amounted to only 1.4% of GDP over 11 months,” the prime minister said, opening a government meeting on Wednesday.



State-controlled PrivatBank (Kyiv) paid 80%, or UAH 19.4 billion, of profits for 2020 to the state budget, the bank’s press service has said.
According to the report, over the past three years, PrivatBank has directed UAH 55.4 billion to the state budget.
As reported, on April 28, the Cabinet of Ministers approved the distribution of the bank’s profits for 2020. In particular, in addition to paying dividends, the government allocated UAH 3.645 billion (15%) to cover the accumulated losses of previous years, and UAH 1.215 billion (5%) to the reserve fund.
On December 18, 2016, the government of Ukraine, referring to the proposal of the National Bank and the former shareholders of PrivatBank, decided to nationalize this largest financial institution on the Ukrainian market and injected over UAH 155 billion into its capital.
According to statistics from the National Bank of Ukraine, as of March 1, 2021, in terms of total assets (UAH 561.062 billion) PrivatBank ranked first among 73 banks operating in the country.

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