The increase in excise duties on cigarettes by more than 30% will trigger the growth of the black market

Повышение акцизов  на сигареты более чем на 30% спровоцирует рост теневого рынка – эксперт 

The increase in excise duties on cigarettes by more than 30% will lead to growth of black market tobacco products.

This commentary, ГолосUA said the expert on political and economic issues Vsevolod Stepanyuk.

“The increase in excise duties mainly due to the filling of the budget. What is the excise tax on cigarettes want to raise more than 30%, it is actually the recognition of the level of inflation in comparison with last year. Naturally this will lead to a rise in price of cigarettes by 25-27% and will lead to the growth of the shadow market. Hard to say, will I get anything out of this budget. It is unlikely that these 30% will go there,” said Victor Stepaniuc.

He said that the move will not lead to a rise in tobacco smuggling, as it goes from Ukraine to other countries.

“We have today the cheapest cigarettes in Europe”, concluded Victor Stepaniuc.

Recall, the Ukrainian government has prepared a new plan of raising excise taxes on tobacco from January 2019, the average price of a pack of cigarettes will be about 36 USD.

This was reported by Ukrainian centre for tobacco control NGO “Life”.

“The government offers to raise excise on cigarettes by 30.8% from 1 January 2019. A proposal was submitted by the Cabinet of Ministers the draft law No. 9085 dated 17 September,” the organization reports.

According to the document, for cigarettes the minimum excise tax will increase from 773,2 hryvnia per 1,000 in 2018 to 1011,35 UAH in 2019. The minimum excise tax on a pack of 20 cigarettes in 2019 will be of 20.23 UAH UAH was 4.76 higher than in 2018. VAT and retail (5%) of the excise tax burden on a pack of cigarettes will increase by 5.79 UAH.

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