The Framework Convention Alliance for Tobacco Control

Tobacco taxes rising in Ukraine; NGO warns against ‘warehousing’

An ad for Ukraine's smoke-free law.Thanks to civil society protests, the Ukraine Government will increase tobacco taxes by 25 percent on 1 July 2014.

After the government announced a planned increase of just eight percent, activists protested. They campaigned in the media, picketed the office of the Cabinet of Ministers and contacted the Ministry of Finance, until the government relented. 

With the new tax rates, prices are expected to rise 12-15 percent, according to Advocacy Centre "LIFE", an FCA member. However, it anticipates that tobacco companies will try to avoid the new taxes as long as possible. 

$US30 million at stake

"We anticipate the tobacco industry will 'warehouse' products over the next three months, and the state budget will lose about US$30 million," said Andriy Skipalskiy, Coordinator of the Smoke Free Ukraine Project implemented by the Centre.

"The government should also take legislative precautions in future to avoid overproduction of excisable goods before the expected excise taxes increase," he added. 

In 2013, Ukraine banned tobacco advertising, adopted 100 percent smoke-free work places, and mandated graphic warnings on tobacco packages. The result was a 10 percent drop in consumption, according to the Centre. 

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