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Politics 2019-11-18T04:01:39+02:00
Ukrainian news
In November Philip Morris substantially reduces production in Ukraine because of the notorious amendment to th

In November Philip Morris substantially reduces production in Ukraine because of the notorious amendment to the bill #1049

Philip Morris Ukraine PJSC is forced to reduce production in November due to uncertainty as for the amendment #8 to the bill #1049, which introduces the fixed profit margin for whole and retail cigarette sales.

This was reported by the press service of the company.

The decrease in production volumes will lead to the decrease in excise duty payments due to the reduction of the excise stamps purchase.

Thus, it is projected that the amount of excise tax paid in November 2019 will decrease by 32% compared to the average monthly payments.

In October 2019, the company paid UAH 1.3 bln. excise tax.

Today, Philip Morris Ukraine JSC is one of the largest manufacturers of cigarettes and the leader in Ukrainian tobacco market. For 2018, the company paid over 16.3 bln. UAH in taxes and fees to the budgets and state funds, including 12.8 bln. UAH of excise tax.

Earlier, the Ukrainian Association of Tobacco Manufacturers "Ukrtutun" addressed the official letter to the President of Ukraine Volodymyr Zelensky asking him not to sign bill #1049 because of the notorious amendment #8 to this bill.

- This amendment will increase the average price of cigarettes by 18% (an average of 7 UAH per pack) in addition to the price increase due to the excise tax increase by 20% since January 2020 (an average of 6 UAH per pack), as it is stipulated by the Tax Code. As a result, the price of cigarettes will increase by an average of 13 UAH, which will lead to an additional rise of illegal trade - stated in the Association "Ukrtutun".

- We ask you, Mr. President, to immediately intervene in the situation and prevent blatant violation of the requirements of the laws of Ukraine regarding the restriction of competition in tobacco market and to ensure the exclusion of amendment #8 from the bill #1049 – stated in the Association.

Other tobacco companies have already announced the suspension of production in Ukraine and withdrawal of previously ordered excise stamps.

Thus, British American Tobacco has already stopped production of cigarettes at its factory in Pryluky (Ukraine), withdrew 25 mln pre-ordered excise stamps for the total amount of more than 505 million UAH.

Japan Tobacco International has withdrawn approximately 16 mln excise stamps totaling 350 million UAH.