Last year Ukrainian state budget lost about 20 billion hryvnas due to corruption and counterfeiting in the market of excise goods — particularly, tobacco products. And President’s Office is ready to take an action to solve this problem — stated the Member of Parliament of Ukraine and Secretary of National Investment Council under the President of Ukraine Halyna Yanchenko in her Telegram channel.
“20 billion hryvnas are huge funds for the country at war and with a huge budget deficit. It is very bad that Western media have already begun to notice this trend”, — said Halyna Yanchenko.
She also mentioned, she recently sent the appeal to the Office of the President and to the Cabinet of Ministers of Ukraine with the proposals on how to cancel the largest corruption schemes and to increase the flow of funds to the budget without raising taxes — including the fight against the shadow market of excise goods.
In the official response, dated June 6, 2023, to this appeal, the Office of the President of Ukraine stated:
“We support the need to drastically strengthen the work to solve the problem related to the illegal circulation of tobacco products. (...) Taking into account the aggravation of this problem, as of the beginning of the second half of 2022, as well as the initiative of European Business Association to develop effective mechanisms to counter the increase of illegal tobacco trade in Ukraine, the Office of the President of Ukraine in September 2022 turned to the Cabinet of Ministers of Ukraine with a proposal to take systemic measures to resolve the mentioned problem”.
The Office of the President of Ukraine also reminded of the recent decision of the Parliamentary Committee on Finance, Tax and Customs Policies dated May 8, 2023, which, in particular, stipulates the preparation of a bill prohibiting the sale of cigarettes in duty-free shops during martial law period.
Sales of duty-free cigarettes outside duty-free shops currently account for about half of all illegal cigarettes sold in Ukraine.
Due to the closure of airports during the war, the number of duty-free shops in Ukraine was reduced by three times, but at the same time the production of duty-free cigarettes decreased by only a quarter.
“Every hryvna to the budget is important for our Army," — said the Member of Parliament, Secretary of the National Investment Council under the President of Ukraine Halyna Yanchenko.
According to the results of the monitoring of illicit trade of tobacco products in Ukraine, systematically conducted by Kantar Ukraine, in the beginning of 2023, the share of illegal cigarettes reached 20.2% of the entire market of tobacco products in Ukraine. For the last three years, the share of illegal cigarettes in Ukraine has tripled.
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