12:33 15.10.2014

Increase in excise duties to result in expansion f shadow tobacco market, says expert

1 min read
Increase in excise duties to result in expansion f shadow tobacco market, says expert

The increase in the excise duty for tobacco by 5% will result in growth of counterfeit products, a board member of the National Organization of Retail Trade Yuriy Bondarev said at a roundtable in Lviv on Tuesday.

"Now we see attempts of increasing the excise duty by 5%. Actually, this is not the excise duty, this is a new tax on turnover. If the excise duty is increased, growth in counterfeit products and smuggling of tobacco products will be again seen," he said.

Bondarev said that the increase in taxes will be an additional burden on legal business and buyers.

"Business cannot operate with losses. We again slip our hands to the pocket of buyers. We need to consolidate efforts for establishing the reasons and not allowing the increase in the number of counterfeit products," he said.

According to information from the roundtable participants, in Q1, 2014 the illegal turnover of tobacco products in Ukraine came to 9.2% of the market.

In 2013, the total tobacco market in the country was assessed at UAH 44-47 billion.

Market players assess losses of the state from non-receiving of the excise duty from sale of illegal tobacco products at UAH 2 billion.

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