State Fiscal Service to insist on floor prices of tobacco at UAH 14.50-15.50 per package

The State Fiscal Service of Ukraine will insist that the floor prices of tobacco are set at UAH 14.50-15.50 per package, Head of the State Fiscal Service Roman Nasirov said at a press conference in Kyiv on Tuesday.

"I think that it is fair to set [the price] of unfiltered cigarettes at UAH 14.50 and filtered cigarettes – UAH 15.50 [per package]. I will insist on this," he said.

Nasirov said that at present, a package of filtered cigarettes could be bought for UAH 9. However, the cost of the package should include UAH 8.52 of the excise duty, UAH 2-2.50 of the cash cost, around UAH 2 of VAT, expenses on logistics and the manufacturers' margin and retail chain's markups, which is around UAH 15 per package.

He said that when cigarettes are sold at the price that is lower than UAH 14.50-15.50 per package, manufacturers do not pay enough VAT and profit tax.

He said that the cabinet would pass the resolution on the floor prices of cigarettes in a week or two.

Deputy Finance Minister of Ukraine Olena Makeyeva said at a briefing in Kyiv on Tuesday that the government has not yet made the decision on the floor retail prices of cigarettes, although a meeting of the working group chaired by Ukrainian Prime Minister Arseniy Yatseniuk with participation of representatives of the tobacco sector was held and the agreements on the issue have been reached.

She said that at present, the final document is being agreed with profile agencies.