The Verkhovna Rada supported the increase in the excise tax on cigarettes and fuel

At its meeting on June 4, the Verkhovna Rada (the Ukrainian Parliament) in the first reading supported project No. 11090 on increasing the excise tax on tobacco products and project No. 11256-2 on increasing the excise tax on fuel.

The MP from "Voice" Yaroslav Zheleznyak reported this.

Excise duty on tobacco products

The project was supported by 249 MPs. He proposes to establish new rates of excise tax on tobacco products from January 1, 2028, taking into account the minimum level determined by EU Council Directive 2011/64/EU.

This means that:

• excise tax on cigarettes is pegged to the euro, not the hryvnia;
• in 2025, the excise tax will increase by 23%, and then from 2026 to 2028, it will increase by 5% annually.

It is expected that the law will increase budget revenues in 2025 by UAH 612 million, in 2026 — by UAH 5 billion, in 2027 — by UAH 9.3 billion, and in 2028 — by UAH 13.8 billion.

At the same time, Member of Parliament from "European Solidarity" Iryna Gerashchenko noted that the document provides for an increase in the excise duty on traditional cigarettes, but not on electronic cigarettes.

"The excise tax on cigarettes from January 1, 2026 will be 90 euros, and on IQOS only 72 euros, that is, the tax gap will be 18 euros and this will bring huge losses in the budget," she wrote.

Excise duty on fuel

227 deputies voted for the alternative draft law No. 11256-2 on increasing the excise tax on fuel, Zheleznyak writes.

According to the document, the government plans to increase excise tax rates on gasoline to 359 euros per 1 000 liters, on diesel fuel to 330 euros per 1 000 liters, and on liquefied gas to 277 euros per 1 000 liters by 2028.

It is expected that in the case of the adoption of the draft law, 1.6 billion hryvnias will be added to the state budget in the second half of 2024, according to the explanatory note.