: :inin Kyiv (EET)

Ukraine`s Cabinet wants higher excise tax on alcohol and tobacco


Ukraine`s Cabinet of Ministers proposes amendments to the Tax Code providing for a 20% increase in excise tax on alcoholic beverages, and a 30% increase in a specific rate duty on tobacco along with an increase in ad valorem excise tax by 3 percentage points to 15% from 12%.

Respective changes are included in draft law No. 5132 on amendments to the Tax Code of Ukraine.

”Changes to the Tax Code of Ukraine proposed in the bill are intended to create conditions for boosting revenues to the budget and ensuring a balanced budget in 2017, as well as to bring it in line with European legislation,” an explanatory note to the bill says.

Thus, the minimum excise duty on cigarettes with and without filter has been raised to UAH 553.48 from UAH 425.75 per 1,000 cigarettes.

In addition, the government proposes the introduction of a single excise tax on diesel fuel at EUR 125.5 per 1,000 liters instead of a differentiated rate of EUR 125.5 and EUR 95, depending on sulfur content.

”Currently excise tax rates on excisable goods are considerably lower than the minimum rates set by the Directives for European countries,” the document reads.

According to the Directives, the excise tax on tobacco is six times higher, that on vodka by 1.5 times, and diesel fuel by 2.6-3.5 times (depending on sulfur content).

Further, the government recommends increasing royalties for the use of radio frequency resources for radio communications within the frequency bands of 2300-2400 MHz and 2500-2690 MHz to UAH 20,000 per 1 MHz from UAH 40.92.

Additionally, royalties for ammonia transit via Ukraine are proposed to be increased to $4.8 from $2.4 per tonne of ammonia per every 100 km of a relevant route.

As UNIAN reported earlier, the draft budget for 2017 projects expenditure growth by 16.7%, to UAH 876.9 billion, and GDP growth by 3%. The government does not plan to raise rates of key taxes.

UaPositon

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