Cigarettes in Ukraine May Become Record High in Price.

The draft budget of Ukraine for 2025 provides for an increase in excise tax on tobacco products. According to the new rates, cigarette prices may rise significantly.

The draft state budget of Ukraine for 2025 provides for an increase in the specific excise rate on cigarettes with and without filters by 23.4% to 58 euros per 1,000 pieces. The minimum tax obligation will also increase by 23.9% from 63.45 to 78 euros per 1,000 pieces.

An important change will occur on October 1, 2024, when excise rates will start to be calculated in euros. This may affect the prices of tobacco products.

It is expected that the increase in excise tax rates on tobacco products will bring an additional 27.1 billion hryvnias of revenue to the state budget. Of this amount, 22.6 billion hryvnias will come from the increase in excise rates, and 4.5 billion hryvnias from value-added tax.

Consumers should not expect an immediate increase in cigarette prices. The increase in excise taxes will span the entire year due to retailer product stocks.

The plan is to leave the excise rates on alcohol and beer unchanged.

In total, excisable goods produced in Ukraine and imported into the customs territory will bring 139.381 billion hryvnias and 147.21 billion hryvnias to the budget, respectively.

The increase in cigarette prices is associated with Ukraine's fulfillment of its European integration obligations.