Companyia Philip Morris International which controls 80% of the turnover of sticks in Ukraine, is reaching into the pockets of all of usis reaching into the pockets of all of us, knocking out a 30% discount on excise duty on sticks – Borys Kushniruk
On Friday, the Parliamentary Committee on Finance, Taxation and Customs Policy, chaired by Danylo Hetmantsev, recommended adopting draft law No. 11090 on amendments to the Tax Code of Ukraine to revise the excise tax rates on tobacco products as a basis.
The main objective of the draft law is to gradually increase the excise tax rates on tobacco products until they reach the minimum level set by Council Directive 2011/64/EU. It also provides for the determination of the monetary unit for measuring the excise tax rate on tobacco products in euros.
Economist Borys Kushniruk believes that such actions of Danylo Hetmantsev are extremely cynical and a new border of the abyss, as they directly lobby the interests of the tobacco giant Philip Morris International, an international sponsor of the war.
“The fact that Danylo Hetmantsev is an extremely cynical and odious person is already widely recognized and does not cause surprise. But every time he is able to prove that he “can’t break through the bottom” because there is an abyss.
I have just learned that Mr. Hetmantsev is in such a hurry to lobby for the interests of the Philip Morris tobacco company that he will push through a draft law on excise taxes at the Verkhovna Rada Conciliation Board that will covertly reduce excise taxes on e-cigarettes and stick cigarettes for Philip Morris International.
Thus, the draft law provides for a 30% reduction in excise tax rates on electrically heated tobacco products (EHT), 80-90% of the market of which is occupied by Philip Morris (IQOS), with a price of 100+ UAH. per pack in Ukraine, and in aggregate, Philip Morris International controls at least 35% of the entire tobacco market in Ukraine,” Kushniruk said.
“I have repeatedly emphasized that I am critical of attempts to raise excise taxes on tobacco products to the minimum level required by the EU without taking into account real incomes. Such a discrepancy between the cost of tobacco products and the income of the population only leads to an increase in the “shadowing” of their turnover and criminalization. According to the latest estimates of marketers, a quarter of the turnover of tobacco products is in the “shadow”. Only those who provide a governmental “roof” for this will benefit.
But now the question is even about that. Mr. Hetmantsev, while constantly trying to raise tax rates, is quietly pushing through a provision to reduce the excise tax on Philip Morris sticks. This is despite the fact that this company is officially recognized in Ukraine as an international war sponsor that pays record taxes to the Russian budget, amounting to billions of dollars.
This company, together with Russian oligarchs, created and still operates a distribution system in both Russia and Ukraine. In Ukraine, the company controls 80% of the turnover of sticks, which it does not produce here but imports from Italy. Now this company is directly reaching into the pockets of all of us, knocking out a 30% discount on excise duty on sticks!
Losses to the Ukrainian budget from such lobbying efforts by Mr. Hetmantsev and those who lobby for Philip Morris International in government offices will amount to 15 billion a year.
Realize it!!! 15 billion UAH! This is in a time of war, when ordinary Ukrainians are transferring 20-50-100 UAH to help the Armed Forces.
Why is this happening!!!? What are Philip Morris’s merits? Is it anti-merit that Ukrainian officials and MPs value? What’s going on?
Ukrainian security forces organize “mask shows” for Ukrainian business for small business relations with Russian companies, with arrests and imprisonment, and in the case of Philip Morris International, where billions of dollars are paid to the Russian budget, our authorities and law enforcement officers see nothing, moreover, they also give openly corrupt tax preferences!!!
Some kind of parallel reality!!!
And all this when they want to increase the military tax rate, VAT and excise rates, and raise electricity tariffs for people and businesses.
Again. The share of sticks in the smoking products market is already 35%.
Philip Morris controls 80-90% of the stack turnover,” emphasizes Kushniruk.
The economist adds that the Philip Morris tobacco company, which is officially recognized in Ukraine as an international sponsor of the war, should not be allowed to
received tax preferences. It should also immediately leave the Russian market.
“It is obvious that the reduction of the excise tax on tobacco products should be removed from this draft law. It is necessary to establish excise taxation of wastewater at the level of minimum excise taxation and introduce an ad valorem rate for fuel storage units,” the economist summarizes.