Ukraine’s parliament passes bill to increase tobacco taxes

Source: Bukvy

Ukraine’s Verkhovna Rada has approved Bill No. 11090 that raises excise taxes on tobacco products. Backed by 237 MPs, the policy ties excise rates to the European currency, which will soon see the cost of a pack of cigarettes grow by at least 40 hryvnias.

The lamwakers though dropped an amendment that sought to equalize taxes for electronic cigarettes and heated tobacco devices. According to MP Oleksiy Honcharenko, the amadment could help bring an estimated 20 billion hryvnias in potential revenue.

“We demanded that taxes for electronic cigarettes be equalized, but this wasn’t supported. The state will lose 20 billion UAH that could have gone to our military,” Honcharenko stated.

MP Yaroslav Zheleznyak said the amendment received only 148 votes, falling short of inclusion in the final bill.

The controversial decision sparked debate about the efficacy of Ukraine’s tax policies during wartime and the missed opportunity to maximize budget revenues.

Center for Liberation Movement Studies director Yaryna Yasynovych criticized the vote results, arguing that it benefit major tobacco companies many of which ontinue to operate in Russia.

“The parliament just handed them 20 billion hryvnias. Ukrainians won’t be able to buy weapons for the Armed Forces with this money, but tobacco will remain accessible, even to minors,” Yasynovych said.

She also pointed out the disparity in the government’s policies with most of workers expected to tighten their belts amid war-related hardships and tax hikes, while large corporations are spared of many financial challenges.