Draft Law of Ukraine

"On Amendment of the Law of Ukraine "On Rates of Excise Duty for Tobacco Products"

The draft suggests establishing that rates of excise duty in percentage to turnover from sale of goods (products) for tobacco non-filter cigarettes shall total 5% from January 1, 2004, but at least UAH 2 per 1,000 cigarettes. The rate of 5%, but at least UAH 4 per 1,000 cigarettes is suggested to be established for tobacco filter cigarettes.

According to the effective Law of Ukraine "On Amendment of the Law of Ukraine "On the State Budget of 2003" and Some Other Legislative Acts", which introduced amendments to the Law of Ukraine "On Rates of Excise Duty for Tobacco Products", from January 1, 2004, the respective rate of excise duty for tobacco filter and non-filter cigarettes shall reach 5%.

The draft, if approved, will contribute to eliminating the possibility of artificially lowering tax basis at the expense of lowering real price for tobacco products. This, in its turn, will help avoiding anti-competitive measures, which may arise, when applying rates of excise duty in percentage to turnover from sale of goods (products).