In Ukraine may significantly increase in price cigarette

From January 1, 2018, a pack of the cheapest cigarettes can cost 28 USD.

From 1 January 2018 in Ukraine may significantly increase in price cigarette. This is stated in the appeal of the Association of manufacturers of tobacco products to the head of the Verkhovna Rada Committee on taxation and customs policy Nina southerner, which was made available to Корреспондент.net.

According to the Association, at the moment through the Verkhovna Rada of Ukraine are trying to pass a law that will equalize the price of tobacco products of medium and low price segments, which in turn will destroy the Ukrainian manufacturers of cigarettes.

“The consequences will be fatal to the state budget and the economy in General, and the cheapest pack of cigarettes will cost not less than 28 UAH already 1.01.2018,” the letter reads.

In the letter we are talking about bill No. 6683 On amendments to the Tax code of Ukraine regarding peculiarities of taxation of tobacco products.

“The draft law “cigarette cartel” is planning to set a rate of 1.85, which fixed the minimum price of tobacco products on the market at least 28,00 UAH. In the basis of the occurrence, calculation and application of this ratio certainly is corruption, which in turn will lead to the creation of monopolies that destroy competition in this field will allow for a more expensive segment of tobacco products to destroy the cheaper segment, will provide foreign producers a huge windfall bypassing the state budget and also will create preconditions for the growth of the black market tobacco products,” write the authors.

In their opinion, such conditions will hurt Ukrainian consumers, and domestic producers, who now have the opportunity to compete by lowering production costs and prices of goods.

“A detailed analysis of the bill is absolutely clear that the four foreign manufacturer of tobacco products we want to install the same level of the value of tobacco products of all brands of medium and low price segment, which will serve as a minimum price. This, in turn, will allow them to supplant the market products lower the cost of their products higher cost”, – underline the authors of the letter.

Industry associations also say that bill No. 6683 completely contrary to the present European legislation (namely the EC Council Directive 2011/64 / EU of 21 June 2011), as well as the Agreement on Association of Ukraine with the EU.

“To avoid risk it is necessary to uniformly and uniquely to distribute the tax burden among all price segments of tobacco products, as proposed in the alternative draft law No. 6683-1 from 21.07.2017. Calls for an increase in the specific excise tax rates by 33%, increase in ad valorem excise tax rates of 8% (from 12% to 20%) and an increase in the minimum excise burden per thousand cigarettes to 792,75 UAH that will provide estimated additional revenues to the budget of 11.8 billion UAH per year. Data the excise tax will provide the establishment of excise tax in the price of tobacco products at least 60%, which, in turn, will significantly reduce the risk of growth of the shadow market in Ukraine”, – say the Association of manufacturers of tobacco products.

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