VAT is one of the major sources of public revenues in Ukraine. In contrast to the majority of countries that administer VAT, the administration of this tax in Ukraine is problematic. The major problems are VAT refund debt, numerous tax exemptions and extremely low VAT compliance. These problems certainly complicate the forecast of the VAT public revenues. That is why, the major objective of the paper has been to test different methodologies for forecasting VAT revenues. Specifically, employing effective rate approach we found that actual VAT revenues are less than a half of potential VAT revenues. Moreover, using econometric method we established stable empirical long-run relationship between VAT revenues and VAT base. Finally we developed appropriate ARIMA model for forecasting VAT revenue in the short run. The ARIMA model has given us a reasonable forecast of VAT revenues for 2003 that is fully consistent with government projections for the budget 2003.