The European Commission emphasizes the importance of Ukraine aligning its excise tax rates on various categories of tobacco products with European standards.
"Regarding excise duties on tobacco products, the Tax Code of Ukraine is generally aligned with EU legislation. Further alignment is needed for different categories of tobacco products and the excise tax rates applied in accordance with EU norms," states its report.
This alignment of tax rates on cigarettes and heated tobacco products is outlined in government draft law No. 11090, which was submitted by Prime Minister Denys Shmyhal to the Verkhovna Rada of Ukraine on March 18, 2024, based on proposals from the Ministry of Finance.
In December, the Verkhovna Rada is preparing to review it in the second reading.
As noted, the draft law proposes converting the excise tax rates on tobacco products to euros; extending the current excise schedule until 2028 to finally achieve the minimum level set by the EU (90 euros per 1000 cigarettes), as well as implementing European practices for taxing heated tobacco products in terms of differentiating excise rates compared to cigarettes.
Business associations have appealed to the Verkhovna Rada to support in the second reading the government draft law No. 11090 on increasing the excise tax on tobacco products and harmonizing it with the European approach to taxing heated tobacco products.