The Ukrainian government has proposed to increase excise duties for tobacco products in 2009 twice – from January 1 and from July 1 – to the parliament. The draft law has been registered in the parliament. The document foresees that from January 1 to June 30, 2009, the excise on filter cigarettes will grow from present UAH 30 per thousand cigarettes to UAH 37.5, and non-filter cigarettes – from UAH 12,500 to UAH 15,600.
The government also proposed to set the excise of UAH 37.5 per thousand cigars instead of present UAH 30, and UAH 6.25 per kilogram of snuff and chewing tobacco instead of UAH 5 pre kilogram.
The draft law foresees that from July 1, 2009, the excise on tobacco products will be higher: UAH 47 per thousand of filter cigarettes, UAH 19.5 per thousand of non-filter cigarettes and UAH 7.8 per kilogram of snuff and chewing tobacco.
The excise rate from turnover will remain the same.
According to an explanatory note to the draft, the excise duty for tobacco products in Ukraine does not efficiently fulfills the functions of restrictiing cigarette consumption and is one of the lowest in Europe.
The authors of the document said that the increase in the excise would allow boosting the revenues target of the budget by UAH 1.2 billion per year.
