Philip Morris' taxes in Ukraine increased by 18% in Q1 2026
Philip Morris Ukraine (PMU) and Philip Morris Sales and Distribution LLC paid a total of UAH 15.1 billion in taxes for January-March 2026, an 18% increase compared to the same period last year. The bulk of this revenue came from excise duties and value-added tax (VAT), according to a PMU press release.
As Serhiy Kalnochenko, CFO of Philip Morris Ukraine, emphasized in the press release, the increase in the volume of taxes paid was primarily due to an increase in excise taxes and coordinated and efficient operational work.
"The beginning of 2026 was extremely difficult for all Ukrainians due to constant shelling and prolonged power and heating outages. For Philip Morris, the missile strike on its Kharkiv factory in January was an additional serious shock. At the same time, we fully fulfilled our obligations to the state, partners, and consumers," the PMU quoted Kalnoochenko as saying.
According to him, the company has paid UAH 189 billion in taxes since the start of the full-scale war.
"This amount could have been significantly higher had the state more effectively combated the illegal cigarette and vape market," added Philip Morris' CFO in Ukraine.
Kalnoochenko explained that over the past few years, the illegal tobacco market has morphed into two categories: gray cigarette production, which also counterfeits international brands, whose share has remained at around 18% over the past six months; and the illegal trade in e-cigarettes, which, according to Kantar, accounts for over 93%.
"The state loses over UAH 28 billion in taxes due to the illegal cigarette market and another UAH 7.5 billion due to the illegal trade in vapes. Moreover, illegal e-cigarettes are sold openly, even near metro stations and in shopping malls. If we draw an analogy with other sectors, the losses from the illegal cigarette and vaping markets are almost twice as large as the state's planned expenditures on veteran support in the 2026 budget," he added.
Philip Morris Ukraine (PMU) has been operating in the Ukrainian market since 1994 and is one of the largest taxpayers. In 2024, the company opened a new factory in Lviv region, investing $30 million and creating 250 jobs. Last year, the company invested $5 million in promoting its ZYN nicotine pouch brand in Ukraine, and this year it plans to invest another $10 million in developing the nicotine pouch category and launching a new brand line.
In late January 2026, a nighttime missile strike damaged part of the company's Kharkiv factory, suspending operations on February 24, 2022. The company preliminarily estimates losses at $16 million.
The company also provides humanitarian support to communities in Kharkiv, Lviv, and Kyiv regions and collaborates with rehabilitation foundations Superhumans, U+System, and UNBROKEN. Since the beginning of the full-scale invasion, projects worth UAH 431 million have been implemented.
