You're reading: Increase in excise tax on alcohol and cigarettes entails reduction in revenues to budget

Ukraine's Ministry of Finance has noted a decrease in revenues from the increased excise taxes on alcohol and tobacco products.

“From July 1 excise taxes on alcohol were increased by 27 percent, we can
raise the tax more but this requires additional calculations, as the
increase in excise taxes on beer, alcohol and tobacco products entails a
reduction of revenues to the national budget,” Finance Minister
Oleksandr Shlapak said at a meeting of the Verkhovna Rada.

According to him, any further parliamentary proposals to increase
excise taxes will be discussed with the market participants and analyzed
by the Finance Ministry in terms of their effectiveness in filling the
budget.

As reported, the Verkhovna Rada on April 10 voted in favor of raising
excise duties on alcohol from July 1 instead of the expected Sept.
1, 2014. Excise duties on spirit, alcoholic distillates, alcoholic
drinks are increased from Hr 56.42 to Hr 70.53 per liter of 100 percent
spirit.

Excise tax on tobacco products was raised by an average of 25 percent from
July 1. Excise duty on beer in the country from May 1, 2014 increased by
42.5 percent, to Hr 1.24 per liter.