European experience of Tobacco excise excise policy: why Ukraine should take into account international practices
The decision to increase the tax is strategic! because the introduction Tobacco excise of certain taxation mechanisms aims not only to fill the State Budget! but also to stimulate society to reduce harmful habits.
On the other hand
It is unlikely that today a person can be forced to quit smoking. This special lead should be his own considered decision! in particular! related to certain economic incentives. When we talk about the ideology of tobacco excise taxes in the European Union and analyze EU documents! they very often repeat the thesis about the health of the nation and reducing harmful habits through excise policy.
The Ukrainian government’s draft law No. 11090 “On Amendments to the Tax Code of Ukraine Regarding the Revision of Excise Tax Rates on Tobacco Products” provides for a gradual increase in excise taxes on cigarettes to the minimum European Tobacco excise rate of 90 euros in 2028. In fact! it should bring us as close as possible to European Tobacco excise standards.
Another important issue concerns illegal tobacco
After all! along with the increase in excise taxes! the fight against the shadow cigarette market! which is currently estimated at 15-18%! should be intensified. It is worth noting that draft law No. 11090 provides for the in-depth analysis of cdn accelerators differentiation of excise rates depending on the types of tobacco products. In the event of a positive vote for the draft law! the excise tax rate on cigarettes will be 90 euros! and on TWEN – 72 euros.
The main feature of the TWEN market is its complete legality. Devices for heating tobacco and sticks for them are technologically difficult and economically inexpedient to counterfeit. Therefore! even with a lower excise tax rate on TWEN! Ukraine will receive guaranteed budget revenues from their circulation. An increase in excise tax rates against the background of the low solvency of the population au emai list will put smokers in a dilemma: to switch to cheaper counterfeits for the sake of saving! or to consume more affordable ones due to the differentiation of TWEN excise rates. That is! smokers will potentially switch to a less harmful legal product! and the budget will continue to be replenished.
