Changes in the excise goods’ illegal market were discussed at the conference "How to combat illicit trade in Ukraine?" which was held in Kyiv on March 1. Head of the Parliamentary Committee on Finance, Tax and Customs Policy, Danylo Hetmantsev, researchers of the Healthy Initiatives NGO, members of the Ukrainian Business Council and experts of leading analytical centres participated in the event.
Experts of the Economic Expert Platform presented the conclusions of the shadow sector of tobacco products’ market in 2022. According to the analysts, the shadow share of tobacco products is 19.9%.
Compared to 2021, there have been positive developments, such as termination of one of the largest illegal tobacco factories’ activity, and creation of the Bureau of Economic Security.
However, the domestic market remains vulnerable to illegal excise goods, the Bureau of Economic Security does not work as effectively as one would like, nor there is a Strategy in the field of combating illegal importation, production and circulation of tobacco and alcohol products.
According to the Growford Institute, budget losses from the illegal circulation of tobacco products amounted to UAH 19.1 billion in 2022 – i.e. 23% more than in the previous year. Out of the total volume of the illegal tobacco market in Ukraine, 56% are duty-free cigarettes, 36% are counterfeit products, and 8% are smuggled products. The main sales channels are retail kiosks (37%), shops (27%), street vendors (23%) and open markets (9%).
The accounting and control of excise goods within the country will be strengthened, Danylo Hetmantsev promised. The law on the electronic excise stamp was adopted in the first reading, while the working group of the committee on finalizing draft laws is currently underway.
Experts and business representatives consider it necessary to implement a number of key documents: Protocol on the Elimination of Illegal Trade in Tobacco Products, European Directives 2014/40/EU and 2007/74/EU. The government promises to implement these documents by the end of 2023.
It is also appropriate to develop and approve a comprehensive Strategy in the field of combating illegal import, production and circulation of excise goods for the period 2023-35, to implement successful global experience in controlling the issuance of a fiscal check (fiscal lotteries or cashback for the buyer).
According to the results of the discussion, the participants reached a common opinion on all issues and agreed on the joint implementation of the planned projects.
Experts of the Economic Expert Platform presented the conclusions of the shadow sector of tobacco products’ market in 2022. According to the analysts, the shadow share of tobacco products is 19.9%.
Compared to 2021, there have been positive developments, such as termination of one of the largest illegal tobacco factories’ activity, and creation of the Bureau of Economic Security.
However, the domestic market remains vulnerable to illegal excise goods, the Bureau of Economic Security does not work as effectively as one would like, nor there is a Strategy in the field of combating illegal importation, production and circulation of tobacco and alcohol products.
According to the Growford Institute, budget losses from the illegal circulation of tobacco products amounted to UAH 19.1 billion in 2022 – i.e. 23% more than in the previous year. Out of the total volume of the illegal tobacco market in Ukraine, 56% are duty-free cigarettes, 36% are counterfeit products, and 8% are smuggled products. The main sales channels are retail kiosks (37%), shops (27%), street vendors (23%) and open markets (9%).
The accounting and control of excise goods within the country will be strengthened, Danylo Hetmantsev promised. The law on the electronic excise stamp was adopted in the first reading, while the working group of the committee on finalizing draft laws is currently underway.
Experts and business representatives consider it necessary to implement a number of key documents: Protocol on the Elimination of Illegal Trade in Tobacco Products, European Directives 2014/40/EU and 2007/74/EU. The government promises to implement these documents by the end of 2023.
It is also appropriate to develop and approve a comprehensive Strategy in the field of combating illegal import, production and circulation of excise goods for the period 2023-35, to implement successful global experience in controlling the issuance of a fiscal check (fiscal lotteries or cashback for the buyer).
According to the results of the discussion, the participants reached a common opinion on all issues and agreed on the joint implementation of the planned projects.
