Ukraine is advancing a draft law that would gradually raise tobacco excise duties through 2028 and shift from hryvnia based rates to euro denominated levels to guard against inflation. This update was reported by RIA News.
The publication notes that Ukraine aimed to lift the tobacco excise by about 20 percent each year starting in 2018. The goal was to secure a baseline tax on consumption that would not fall below 90 euros per thousand cigarettes, a figure aligned with the EU directive on tobacco taxation and duty assessment. The intention was to keep the price floor in line with European standards while allowing for a measured adjustment within the Ukrainian market.
The government stressed that reaching the predicted level became difficult due to currency devaluation and the broader macroeconomic headwinds it generated. In practical terms, the devaluation weakened the effectiveness of the euro denominated thresholds, creating gaps between planned and realized tax receipts.
Earlier discussions by Ukrainian officials pointed toward higher taxes and other fiscal charges intended to offset budget shortfalls. The plan aimed to bolster revenues by about 0.5 percent of GDP, aligning with requirements sometimes associated with international lenders such as the International Monetary Fund, IMF.
Looking ahead, the government plans to present to parliament a bill that would introduce an additional military tax on individual entrepreneurs, commonly known as IPs. This measure is framed as a way to strengthen national defense funding and diversify the tax base to support public spending on security and defense programs.
Recent talks with the IMF have included revisions to Ukraine’s fiscal program, reflecting ongoing negotiations about budgetary discipline, revenue administration, and structural reforms intended to stabilize public finances over the medium term, as noted by IMF officials.