The IMF and the European Commission have made a final decision on the issue of taxation of tobacco sticks
The International Monetary Fund (IMF) and the European Commission expressed their support for the Ukrainian government’s initiative to introduce differentiated tax rates for cigarettes and tobacco waste for heating. There were appropriate positions laid out in the report of the European Commission and in the IMF letter.
“Regarding excise duties on tobacco products, the Tax Code of Ukraine is generally harmonized with EU legislation. Various categories of tobacco products and excise duty rates applied in accordance with EU norms require further coordination.” – the message says.
In its letter, the IMF notes that the proposed approach to taxation is in line with the fund’s recommendations. In particular, for tobacco products for electric heating, a rate of between 45 and 90 euros per 1,000 sticks is recommended. This approach makes it possible to balance the financial goals of the state and tasks in the field of health care. The proposed rate of €72 per 1,000 sticks, which Ukraine plans to implement by 2028, is within the recommended range.
The deputy head of the IMF mission in Ukraine, Trevor Lessard, emphasized the importance of harmonizing Ukraine’s excise policy with European standards. This applies not only to tobacco products, but also to alcoholic products in order to meet the indicators set in the European Union.
The proposed measures are aimed at ensuring stable filling of the budget of Ukraine and support of health care goals, while meeting international recommendations and European standards.
