uAH 133.6 billion was received from the excise tax in the budget for 2024. But it could have been more

3 February 14:42

In 2024, the agricultural sector became the largest payer of excise tax among producers of excisable goods in Ukraine. This was announced by the Minister of Agrarian Policy and Food of Ukraine Vitaliy Koval, Komersant ukrainskyi reports.

The state budget received UAH 105.2 billion, of which UAH 85.9 billion (81.7%) came from agricultural products produced in Ukraine.

Vitaliy Koval reminded that “tax revenues are the basis for financing defense, infrastructure restoration and social programs, and the Ukrainian agro-industrial complex has once again proved its key role in the country’s economy.

The largest revenue categories:

– Tobacco products – UAH 71 billion (plus 16.6% by 2023)

– Alcoholic beverages – UAH 8.75 billion (plus 8.9%)

– Wine products – UAH 2.26 billion (plus 20.3%)

– Beer – UAH 3.78 billion (plus 5.1%)

– Ethyl alcohol – UAH 124 million (at the level of 2023)

In addition, UAH 29 billion of excise tax was received from imported excisable agricultural products.

Excise tax revenues increased in 2024

In 2024, the general fund of the state budget received UAH 133.6 billion of excise tax on manufactured and imported excisable goods.

This is 16.5% (UAH 18.9 billion) more than in 2023. The revenue target was fulfilled by 103.3%, with an additional UAH 4.3 billion coming to the budget.

UAH 11 billion was received from alcoholic beverages produced and imported into the customs territory of Ukraine. This is 8.5% (UAH 0.9 billion) more than in 2023 and 15% (UAH 1.4 billion) more than the revenue figure.

Last year, UAH 96.6 billion was paid in taxes on manufactured and imported tobacco products. This is 20.3% (UAH 16.3 billion) more than in 2023 and 7.7% more than the revenue figure.

But there could be even more revenues

At the beginning of December last year, the Verkhovna Rada adopted the Law on Amendments to the Tax Code of Ukraine on Revision of Excise Tax Rates on Tobacco Products. As explained by Danylo Hetmantsev, Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, the law provides for the conversion of excise tax rates on tobacco products into euros and a gradual increase in specific cigarette excise tax rates until the minimum level is reached by 2028, established in the EU – 90 euros per 1000 cigarettes, as well as the implementation of European practice of taxing tobacco sticks for heating in terms of differentiating excise rates compared to cigarettes.

According to MP Yaroslav Zhelezniak, this year the price of a pack of cigarettes should have increased by about 40 UAH.

It should, because the law submitted to the President for signature on December 12 last year has not yet been signed. Yaroslav Zheleznyak, who has been following the saga of the president’s approval of the law, stated on February 1 that the head of state has not yet done so. The MP, who considers this a “direct violation of the Constitution,” emphasized that “failure to sign the law on time has already cost the budget UAH 831.6 million since January 1.”

Paper excise stamps will be replaced by electronic ones

E-excise, an ambitious project aimed at combating the shadow tobacco and alcohol markets, is about to be launched. It is to start in a test mode with the involvement of taxpayers on a voluntary basis in March 2025. This was recently announced by Danylo Hetmantsev, Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy.

According to him, the reform in the field of excise tax administration is aimed at

– de-shadowing of the tobacco and alcohol markets and increasing budget revenues from excise tax;

– harmonization of legislation with European requirements for the circulation of tobacco products;

– ensuring equal competitive business conditions for taxpayers in this area;

– replacement of paper stamps with electronic ones and automation of reporting processes on the use of excise stamps;

– tracking the movement of alcohol, tobacco products, and e-cigarette liquids from the manufacturer/importer to the end consumer;

– receiving high-quality data to generate analytics.

As Danylo Molchanov, project manager of the Digital Transformation Support project, explained in an interview, “the idea is that the excise stamp that exists today will be replaced by a corresponding datamatrix (code) that will be applied directly to the packaging of tobacco products or to the bottle.” According to him, consumers will be able to check the legality of the product by pointing their smartphone camera at this code.

Василевич Сергій
Editor