​The Ministry of Finance presents a draft law on the taxation of tobacco products for a public discussion

4/20/18

The Ministry of Finance has presented the draft law “On Amendments to Art. 221 of the Tax Code of Ukraine In Regard to the Taxation of Tobacco Products” for a public discussion.

What’s it about?

To approximate the legislation of Ukraine to the EU regulations on the rate of the excise tax for tobacco products and to ensure equal terms for all representatives of the tobacco industry, the working group at the Ministry of Finance responsible for the implementation of the fiscal mechanism prohibiting the sale of cigarettes at the price lower than the tax rate and production costs has prepared the above draft law.

The draft law stipulates that a coefficient equal to 1.4 shall be applied for the minimum excise tax amount payable on tobacco products in case if the price of these products is lower than the 1.65-fold of the tax amount payable.

What’s the benefit?

The implementation of this mechanism will make it possible to reduce the sale of cigarettes at lowered prices which is sometimes the case in Ukraine. Also, it will promote the fair competition for all market players. The draft law is also in line with Ukraine’s commitments agreed in the Association Agreement with the EU, especially in regard to the implementation of the minimum excise tax on tobacco products.

What comes next?

After the discussion the draft law will be submitted to the Cabinet of Ministers and then to the Parliament.

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