Tobacco taxes to increase in Ukraine in the coming 7 years

On 7 December 2017, the Parliament of Ukraine adopted a policy on increasing tobacco taxes for the coming 7 years, until 2024. According to the national plan, in 2018 the specific tobacco tax and minimum excise tax per 1000 cigarettes will increase by 29.7%.

Over the next 6 years, tobacco taxes will increase by 20% annually. The Government also maintains the option to propose an inflation adjustment annually. The aim of this policy change is to harmonize tobacco tax rates with the minimum European Union level of taxation, which is 90 euros per 1000 cigarettes.

Over the past years, Ukraine’s experience of increasing tobacco taxes has been positive. In 2008¬–2017, the average rate of excise duty on a pack of cigarettes increased by 20 times, and state budget revenues increased from 3.5 billion hryvnias to the projected 40 billion hryvnias in 2017. The 2017 Global Adult Tobacco Survey showed a 20% reduction in smoking prevalence among adults over the past 7 years in Ukraine.