European Commission insists on harmonizing Ukrainian excise rates on various tobacco products with European ones

The European Commission emphasizes the importance of Ukraine harmonizing excise rates on various categories of tobacco products with European ones.

"As regards excise duties on tobacco, the Ukraine Tax Code is broadly aligned with the EU acquis. Further alignment is needed regarding manufactured tobacco categories and applicable excise duty rates according to acquis. An amendment to the Tax Code to align excise duties on fuel closer to the EU level by 2028 was adopted in July 2024,” its report states.

Such harmonization of tax rates on cigarettes and electrically heated tobacco products is provided for by government bill 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 consider it in the second reading.

As noted, the bill provides for the conversion of excise tax rates on tobacco products into euros; extension of the current excise schedule until 2028 to finally achieve the minimum level set in the EU (EUR 90 per 1000 cigarettes), as well as the implementation of European practice on the taxation of electrically heated tobacco products in terms of differentiation of excise rates compared to cigarettes.

Business associations have appealed to the Verkhovna Rada with a request to support in the second reading government bill No. 11090 on increasing the excise tax on tobacco products and harmonizing them with the European approach to the taxation of electrically heated tobacco products.

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