Lawmaker proposes increasing ad valor rate for tobacco to 15%, double excise duty on beer from 2015

MP Mykhailo Opanaschenko (not a member of any faction) has proposed that the ad valor rate of the excise tax on cigarettes be increased from 12% to 15% from 2015, and the excise duty on beer is increased from UAH 1.24 to UAH 1.50 per liter with the next indexation in 2016 and 2017 by 10%.

Draft law No. 49-76-1 on amendments to the Tax Code of Ukraine was registered in the parliament on June 11, 2014.

The document also presents a three-year indexation plan for alcohol, cigarettes and tobacco: by 8.5% from 2015, by 10% - from 2016 and by another 10% - from 2017.

The similar plan for indexing the excise duties on beer, alcohol and tobacco by the projected inflation rate was recently proposed by MP from the UDAR faction Anatoliy Revenko.

As reported, Ukraine from July 1, 2014 increases excise duties on cigarettes and alcohol.

The specific excise rates on non-filter cigarettes are increasing from UAH 77.5 per 1,000 units to UAH 96.88 per 1,000 units, filter cigarettes from UAH 173.2 per 1,000 units to UAH 216.5 per 1,000 units; raw tobacco, manufactured tobacco and its substitutes, tobacco extracts and essences, cigars and cigarillos from UAH 217.6 per kilogram to UAH 272 per kilogram. The ad valorem tax on tobacco products remains at 12%.

The minimum excise obligation to pay the excise on non-filter cigarette will increase in 2014 from UAH 101.6 per 1,000 units to UAH 127 per 1,000 units; on filter cigarettes, from UAH 231.7 per 1,000 pieces to UAH 289.63 per 1,000 units.

The excise on vermouths and wines is increased from UAH 2.86 per liter to UAH 3.58 per liter; sparkling wines - from UAH 4.16 per liter to UAH 5.2 per liter. The excise rate on alcohol, distilled alcohols and alcohol drinks is raised from UAH 56.42 per liter of 100% alcohol to UAH 70.53 per liter of 100% alcohol.

The beer excise was raised by 42.5% to UAH 1.24 per liter from UAH 0.87 per liter from May 1, 2014.