UA News Brief: Factors contributing to a notable shortfall in customs revenues in Ukraine

▪ Reuters: US confectionary, food and beverage maker Mondelez International has faced a growing corporate boycott in the Nordic region over its continued presence in Russia.

▪ Reuters: Russian state-owned NAMI (Central Research Automotive and Automotive Institute) acquired 100% of the shares in a factory that produces brakes and other systems for cars, formerly owned by Germany's Robert Bosch.

▪ NBU: Ukraine is taking action to include the RF in the blacklist of the Financial Action Task Force (FATF).

▪ Essity: The Swedish manufacturer of hygiene and health products Essity decided to cease operations in Russia.

▪ SCS: The State Customs Service identified several factors contributing to a notable shortfall in customs revenues in Ukraine. One key factor is the "stable" official exchange rate of the USD, set at UAH 36.57/dollar for 2023, which has resulted in discrepancies between the actual exchange rate and the rate used for customs calculations. This difference, combined with a 13% higher budget exchange rate, has led to estimated tax shortfalls of UAH 5.28 B in May alone. Additionally, a decrease in the tax on fuel imports in 2022 has further impacted customs revenues, resulting in a decline of UAH 5.34 B in May.

▪ MoE: On June 6, changes to the compensation procedure were approved, allowing newly created businesses to participate in the government's employer support program for the employment of IDPs. Under this program, these businesses can receive financial incentives and compensation for providing employment to displaced individuals. The program aims to support IDPs and improve the labor market situation, and so far, over 3,500 entrepreneurs have received compensation totaling UAH 78 M since the beginning of 2023 for employing nearly 7,000 IDPs.

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