11:52 06.09.2018

Govt proposes to introduce additional excise duty for tobacco products sold at price lower limit

2 min read
Govt proposes to introduce additional excise duty for tobacco products sold at price lower limit

The Cabinet of Ministers has proposed that the increased rate of the minimum excise duty liability (with 1.4 coefficient) is increased when the price of tobacco products is declared at the level lower than 165% of the respective minimum excise duty liability

According to a bill approved at a government meeting on Wednesday, it is proposed to introduce the relevant changes temporarily, until December 31, 2024.

As indicated in the text of the bill with the corresponding amendments to the Tax Code, which is available to Interfax-Ukraine, synchronously it is proposed to limit the reduction of prices for tobacco products - no more than 5% of the maximum retail price.

Violation of the restriction on the price reduction provides for a penalty - 100% of the value of tobacco products available to the business entity, but no less than UAH 10,000, according to the bill.

According to the explanatory note, which the agency also has, in the current year, certain tobacco manufacturers declared cigarette prices in the amount of UAH 17.15 to UAH 18.58 per package, which is lower than the amount of taxes on the cost of the excise duty for one package (UAH 18.64).

"Such an understatement of prices leads to the fact that the budget receives less money from taxes that depend on the price, namely VAT and excise tax on retail sales," the authors of the bill said.

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