Politics 2021-02-15T04:05:10+02:00
Ukrainian news
First HTP Smuggled From China Discovered In Ukraine

First HTP Smuggled From China Discovered In Ukraine

China, Excise Tax, smuggling, heated tobacco products, HTP

Experts explain this with a sudden increase in the excise tax on heated tobacco products (HTP) since January 2021 (4.2 times).

For the first time, the HTP smuggled from China were found in retail outlets in Ukraine, UNIAN reports.

Previously, only traditional cigarette smuggling had been registered on the Ukrainian market.

There were no smuggled and counterfeit HTP at all.

It concerns, in particular, smuggled Chinese brand of MS.

The packs mention that they are produced by Hongta Tobacco (Group) Co Ltd. in China.

There are no excise stamps on the HTP packs.

All warnings go in English.

It is reported that smuggled HTP are sold at a price of UAH 50.

At the same time, the price of legal HTP after a sudden increase in excise taxes is much higher.

It is noteworthy that this smuggled brand has about 10 flavors in its arsenal - including, for instance, blueberry flavor.

Despite the fact that in many countries, flavors (especially fruit, berry ones) in all tobacco products are legally limited to reduce their distribution, especially among minors.

Experts attribute the appearance of the smuggled HTP from China on the Ukrainian market to a sudden increase in the excise tax on these products.

“The logic of some of our parliamentarians is absolutely incomprehensible to me. Not for a single commodity in the world taxes are increased 4.2 times at once. The first smuggled lot of Chinese HTP in Ukraine in January is just a beginning. There will also follow a wave of smuggling from the Russian Federation, from Moldova, from the occupied territories of Donetsk and Luhansk regions - especially since there is a tobacco factory there,” predicts Oleksandr Yavorskyi, the director of the business competitiveness department of the Federation of Employers of Ukraine.

Tetiana Koschuk, PhD in Economics, an expert on taxation matters, is also expecting a part of the demand to flow from legal to illegal HTP.

“At the end of last year, there were forecasts about a loss in the state budget at the level of UAH 3-5 billion due to the fact that the parliament did not support an amendment on HTP. But I am afraid that the losses go higher. Largely due to the flow of a part of the demand from legal HTP to electronic cigarettes (and there is a rather chaotic situation) and to smuggled products as well. It is a pity, because in Ukraine it would be possible to organize the production of sticks for electronic heating - no worse than in Italy,” said Tetiana Koschuk.

As earlier reported, this week the largest HTP producer - Philip Morris (IQOS brand) - has already warned that due to a sharp increase in excise tax, the company is forced to reduce the procurement of excise stamps for HTP from the planned 50 million to 35 million units.

In tax terms, the difference of 15 million excise stamps means more than UAH 312 million in losses from tobacco excise to the state budget.

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