The Committee of the Verkhovna Rada on Finance, Taxation and Customs Policy has recommended that the parliament adopt in the second reading and as a whole the government bill amending the Tax Code of Ukraine regarding the revision of excise tax rates on tobacco products, reported the Cabinet representative in the Verkhovna Rada, Taras Melnychuk, on Telegram.
"The excise tax on cigarettes is tied to the euro rather than the hryvnia. (…) Essentially, starting next year, cigarettes will cost 40 UAH more. Next year, the law will bring in an additional +20 billion UAH," - wrote the deputy head of the parliamentary committee on finance, taxation and customs policy, Yaroslav Zheleznyak (the "Holos" faction), on Telegram.
According to the table he published, the difference between excises on cigarettes and tobacco products for electric heating (TWEH) will be maintained: in 2025 it will be 10%, in 2026 - 14%, in 2027 - 17%, and in 2028 - 20%. At the same time, excises on cigarettes will increase by 35.4% in 2025, by 17% in 2026, by 8.8% in 2027, and by 8.2% in 2028. Meanwhile, excises on TWEH will rise by 22.2%, 11.9%, 4.2%, and 4.6%, respectively.
The deputy clarified that the government bill was supported by 18 members of the committee; however, he personally abstained.
As reported, bill No. 1109 proposes to establish new excise tax rates on tobacco products starting January 1, 2028, taking into account the minimum level defined by Council Directive 2011/64/EU of June 21, 2011, on the structure and rates of excise duty on tobacco products (codification) for tobacco products for electric heating. Alongside this, it is planned to implement a gradual annual increase in excise tax rates from July 1, 2024, to December 31, 2027, to bring them to the specified minimum level.
The document proposes to define the monetary unit for measuring the excise tax rate on tobacco products in euros. To this end, a procedure for calculating the excise tax on tobacco products at rates in foreign currency has been proposed.
The bill also relaxes restrictive measures for accumulating tobacco products in warehouses before the increase in excise tax rates (anti-forestalling) during the period of martial law by raising the established average monthly sales volume of tobacco products on the customs territory of Ukraine from 115% to 120%.