Ukraine Tobacco Taxes to Match EU’s by 2029

Ukraine will reform its tobacco and fuel excise taxes, gradually introducing excises minimal for the European Union market over the next five years, reports Interfax.

The country previously aimed to increase its tobacco excise tax rates to the EU’s minimal rates before 2025, but the anticipated windfall has since been eaten away by inflation due to the use of the hryvnia as its base rather than the euro. Under the new strategy, Ukraine’s tobacco excise tax rates will be tied to the euro.

The government expects the measure to generate additional revenue equal to between 1.5 percent and 2.2 percent of GDP.

Ukraine also plans to implement an electronic tracking system for tobacco products and e-liquids.

The 2024-2029 National Revenue Strategy is one of the structural benchmarks of the cooperation program with the International Money Fund that Ukraine pledged to fulfill before the end of 2023.