JTI Ukraine refuses to pay for UAH 350 mln excise labels over decline in production
JTI Ukraine, one of the largest tobacco companies in Ukraine, has refused to pay for 16 million excise labels worth UAH 350 million in connection with the reduction of production over the adoption of bill No. 1049 containing a requirement of regulating the cigarette markup, the company told Interfax-Ukraine on Tuesday.
According to JTI Ukraine, the company reduced production by 73% in the second half of October compared to its plans.
As reported, British American Tobacco (BAT), a large global tobacco manufacturer, halted production at the B.A.T.-Pryluky factory in Chernihiv region on October 11, 2019. The company said that the reason was bill No. 1049 adopted by the Verkhovna Rada with the requirement on the government regulation of the markup on their goods. Then the company applied to the SFS with the purpose of withdrawing 25 million excise labels and returning UAH 505 million paid for them.
Earlier Philip Morris Ukraine, British American Tobacco, JTI and Imperial Tobacco in Ukraine are mulling the possibility of decreasing production and later closing the tobacco factories on the territory of Ukraine over the adoption of the legislative requirement on the government regulation of markup on their goods by the Verkhovna Rada.
Bill No. 1049, passed at second reading, introducing a single account for paying taxes and duties, the single social security contribution, sets a fixed markup for wholesale and retail traders of tobacco products at 7% and 13% of the maximum retail price per package.
Later, the Council of Entrepreneurs under the Cabinet of Ministers has asked Ukrainian President Volodymyr Zelensky to veto bill No. 1049 introducing a single account for paying taxes and duties, and the single social security contribution, as it deprives enterprises of the right to set prices for tobacco goods.