Excise tax revenues increased by almost 50%: what is behind the positive dynamics
4 June 21:57
In the first five months of 2025, excise revenues to the state budget of Ukraine showed a significant increase. This was announced by the head of the State Tax Service of Ukraine Ruslan Kravchenko on his official Telegram channel, "Komersant Ukrainian" reports.
Kravchenko informed that from January to May, the state received UAH 69.7 billion in excise tax, which is 48.7% more than in the same period last year (UAH 46.9 billion). The plan was overfulfilled by UAH 11.3 billion, or 19.3% of the target.
May is another record month
In May 2025, the budget was replenished by UAH 15.3 billion of excise tax. This is one of the highest monthly figures over the past few years. This result indicates a stable trend and gives grounds to predict further growth in the second half of the year.
What drives the growth of excise tax revenues
The main factors behind this increase were:
Growth in imports of excisable goods, in particular tobacco products and alcoholic beverages. Importers started to import more products amid the strengthening of the hryvnia and relative stability of logistics routes.
Tighter control over the circulation of excisable goods. The State Tax Service stepped up monitoring of the illegal market through electronic excise tax stamp tracking systems, which helps to reduce the volume of smuggled and counterfeit products.
Optimization of tax administration. Improved digital tools, simplified reporting procedures, and the introduction of risk-based audits have made the excise tax payment process more efficient for businesses and more profitable for the state.
Financial and economic significance
The growth of excise revenues has a double effect. On the one hand, it is a stable source of budget revenues, which is critically important in times of war, when a significant portion of government spending is directed to the security and defense sector. On the other hand, it is a marker of reviving consumer demand and a sign of a certain adaptation of the economy to the crisis.
The increase in excise taxes may also indicate a gradual de-shadowing of the economy. Producers and importers are forced to operate legally as the risks of tax evasion increase and control is tightened. This is especially true for the tobacco, alcohol, and fuel markets.
Expectations for 2025
If the momentum continues, the state budget may receive more than UAH 160 billion in excise tax by the end of the year, which will be a historic high. This will significantly strengthen Ukraine’s fiscal position and partially offset other budget deficits. Economic experts also note that the excise tax remains an important component of the tax system, which requires constant updating in the face of market changes and consumer behavior.
Read also: Tobacco excise tax increase: what has changed for producers, sellers and consumers since March 25
Excise revenues are funds received by the state or local budget from the payment of excise tax. An excise tax is an indirect tax that is included in the cost of certain goods and paid by the consumer in the final price.
In Ukraine, the excise tax is levied on:
- tobacco products (cigarettes, electronic cigarettes, tobacco),
- alcoholic beverages (vodka, beer, wine)
- fuel (gasoline, diesel, gas),
- certain vehicles (for example, when importing a car).
Excise taxes are paid by producers or importers of excisable goods. They include the tax amount in the price of the goods. In fact, the consumer pays the tax, but formally the tax is transferred to the budget by the business.
Why do we need an excise tax?
- Fiscal function: an important source of budget revenues.
- Regulatory function: the state deliberately makes harmful or expensive goods less affordable (for example, cigarettes).
- Social function: excise taxes can be used for healthcare, infrastructure, or defense.
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