President of Ukraine Volodymyr Zelenskyy has signed Law No. 11090 on increasing the excise tax on tobacco products.
According to the bill's card, the document was returned with the President's signature on 24 March.
The explanatory note states that the excise tax on cigarettes will now be linked to the euro. Also, specific cigarette excise tax rates will be increased until 2028 to reach the minimum level set by Council Directive 2011/64/EU. At the same time, the rates for tobacco and manufactured tobacco substitutes will be equivalently increased and reduced for electrically heated tobacco products.
This is in line with the EU-Ukraine Association Agreement. In addition, measures to further increase excise tax rates on tobacco products in line with Directive 2011/64/EU and to convert them into euros are recommended by the International Monetary Fund in its Extended Fund Facility programme for Ukraine.
It is noted that the total excise tax on cigarettes in EU member states should be at least 60% of the weighted average retail selling price of cigarettes produced for consumption and should not be less than EUR 90 per 1,000 cigarettes, regardless of the weighted average retail selling price. For comparison, as of 1 January 2024, the minimum tax liability for cigarettes in Ukraine is UAH 2,516.54 (approximately EUR 60) per 1,000 pieces.
- The Verkhovna Rada approved the draft law as a whole in 2024. Back then, 237 MPs supported the document.