EU opposes introduction of minimum prices of cigarettes

Setting minimum prices for cigarettes goes against Ukraine's deep and comprehensive free trade area (DCFTA) commitments, according to a report of the Delegation of the European Union to Ukraine.

This commitment stems from the Directive 2011/64/EU of 21 June 2011 on the structure and rates of excise duty applied to manufactured tobacco, which applies across the EU.

"However, Ukraine is free to introduce a minimum excise duty on tobacco products, including cigarettes, for the purpose of protecting public health and raising tax revenues (Directive 2011/64/EU)," the delegation said.

As reported, the government plans to send a bill on the increase of ad valorem rate of the excise duty on cigarettes to 15% of largest retail prices with VAT in 2016 and on revoking the requirement to introduce minimum retail prices.