Press Release: Ukraine keeps raising taxes on tobacco to cut down smoking rates
Kiev, 19 February 2019 - Ukraine reports a decrease in the sales of cigarettes, in line with the country's successful steps towards increasing tobacco taxes in the past years. The SFP Coalition Partner NGO Advocacy Center 'Life' has prepared a press release with additional information.
According to the State Treasury, tobacco tax revenue in 2018 amounted to UAH 43.6 billion, which is 9.3% more than in 2017. A significant increase in revenue is the result of an increase of the specific excise tax on tobacco products by 29.7% from January 1, 2018.
At the same time, the sales of cigarettes have decreased from 67 billion to 56 billion sticks, or by 16.4%, compared with 2017. The reduction in cigarette sales happened due to the fact that prices for them over the year increased by 24.5%, while the inflation rate was 9.8%, according to the State Statistics Service.
In 2018, the average price of a pack of 20 cigarettes has increased from UAH 25.3 to UAH 31.6. The difference is UAH 6.3, of which UAH 4.3 is an increase in excise taxes, and another UAH 2 is an increase made by tobacco companies to maintain profitability in terms of decrease in consumption.
"In 2019, the excise tax on cigarettes was increased by 20% from January 1 and will be increased by 9% from July 1. In general, the tax burden on a pack of cigarettes will be increased by almost UAH 6, and the price of a pack of cigarettes is likely to be increased even more. Therefore, we urge all smokers stop spending money on this trash for their own health," said Konstantin Krasovsky, an expert on tobacco control.
The Parliament of Ukraine adopted a plan to increase excise on tobacco products, according to which the tobacco tax will increased by at least 20% annually by 2024. Thus, it is planned to achieve a minimum EU level of cigarettes taxation, which is 90 euro per 1000 cigarettes. Now in Ukraine this tax is around 30 euro per 1000 cigarettes.
"Implementation of the WHO FCTC recommendations on raising tobacco taxes proved to be an effective public health policy in Ukraine. Let’s not forget that 85 thousand people die annually from tobacco-related diseases. Therefore, Ukraine needs to continue increasing taxes on tobacco to save lives," said Lilia Olefir, executive director of the NGO “Life".
Ukraine has a successful experience in the past years of increasing tobacco taxes. Between 2008 and 2018, the average rate of excise duty on a packet of 20 cigarettes was increased by almost 30 times and the revenues increased from 3.5 billion UAH to 43,6 billion UAH in 2018. The number of smokers declined from 10 million to 6.5 million, according to the State Statistics Service. The GATS 2017 showed a 20% reduction in smoking prevalence among adults over the past 7 years in Ukraine.
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