Philip Morris faces unfounded claims from govt agencies in Ukraine – CEO
PrJSC Philip Morris Ukraine welcomes the actions of the Ukrainian authorities to restore the economy, improve the investment climate and business conditions, however, the company said that over the past few months it has been facing numerous unfounded claims from the authorities.
"Due to the stoppage of production in Ukraine, we refocused on imports and immediately faced more than a week of downtime of our products at customs due to bureaucratic procedures for calculating VAT on tobacco products. Then the work of our warehouses was paralyzed by actual inspections by the State Tax Service with unfounded accusations. And any delay in the sale of our products means lost sales and, accordingly, unpaid excise tax, the amount of which can reach UAH 100 million daily," Maksym Barabash, CEO of the company, said in a blitz interview with Interfax-Ukraine.
He noted that such delays are especially strange in the context of Russia's full-scale invasion, when the country needs money due to a huge state budget deficit.
According to the company's general director, representatives of the Bureau of Economic Security (BES) came to the Philip Morris warehouse in Kyiv on June 24 to conduct a search – an urgent investigative action that lasted several days, including during air raids.
"In our opinion, there were no legal grounds for conducting a search by the BES representatives. As a result, a batch of foreign-labeled cigarettes was temporarily seized. This product was produced before the war for the Japanese market and, due to obvious circumstances, cannot be exported. The product is legal stored in warehouses," Barabash explained.
The head emphasized that such a situation interferes with the normal operation of the business and leads to a shortfall of millions of hryvnias in taxes for the state, and the company incurs significant time costs "for explaining obvious things."
Another issue that the company is now solving is the disappearance of a large batch of cigarettes from the customs warehouse at one of the airports in Ukraine, which Philip Morris planned to export to Japan. Now the company finds out under what circumstances and where they disappeared.
"In order for investors to be interested in participating in the recovery programs announced in Lugano, the authorities must take concrete steps so that businesses do not have to deal with such actions of government officials that we constantly face," Barabash stated.
Philip Morris International, which includes PrJSC Philip Morris Ukraine, is one of the world's largest manufacturers of tobacco products.