Cigarette and stick prices will rise, while Ukraine faces financial losses: how excise taxes will impact people's wallets.

The bill to increase excise taxes has already received support in the Rada, but the president has yet to sign it. Media reports indicate that changes are unavoidable, as Ukraine has commitments to the EU.

https://focus.ua/economics/691316-sigarety-i-stiki-podorozhayut-skolko-budet-stoit-pachka2025-02-01 07:57:22

In Ukraine, an increase in excise taxes on tobacco products is expected. The impact on cigarettes and the potential consequences for the budget are discussed in a report by "RBK-Ukraine" dated January 31.

Law Passed, But Not Signed

The bill to raise excise taxes was approved by the Verkhovna Rada at the beginning of December 2024, effective January 1. However, it has been awaiting the signature of President Volodymyr Zelensky since then.

Media estimates suggest that the law will eventually be signed. However, according to Yaroslav Zheleznyak, deputy head of the parliamentary finance committee, due to the delay, Ukraine has already lost over 700 million hryvnias.

Ukraine has committed to the European Union to increase the excise tax rates to 90 euros per 1000 cigarettes, with this target expected to be met by 2028. The excise tax on heated tobacco products, commonly referred to as "sticks," will rise to 72 euros per 1000 pieces.

There will also be an increase in the prices of liquids for electronic cigarettes. In this case, the excise tax is set to rise to 300 euros per 1 liter by 2025.

How Cigarette and "Stick" Prices Will Change

If the law takes effect in its current form, the excise tax on cigarettes will be as follows (per 1000 pieces):

in 2025 — 78 euros (+35.4%);
in 2026 — an additional +5%;
in 2027 — an additional +4.8%;
in 2028 — 90 euros (+4.7%).

The excise tax on heated tobacco products will increase as follows:

in 2025 — to 70.4 euros (up by 22%);
in 2026 and 2027 — by +0.5% each year;
in 2028 — 72 euros (+1.2%).

Currently, the excise tax on "sticks" and cigarettes is the same. However, as explained by Dmitry Kupry, executive director of the NGO "Center for Civil Representation 'Life'," by 2028, the difference will be 25%.

Daniel Getmantsev, head of the Rada's finance committee, reported that in the second half of 2024, the average maximum retail price for a pack of 20 cigarettes was 97.87 hryvnias. If excise taxes are raised, in 2025 it could reach 116.1 hryvnias. "Sticks" currently cost 107.06 hryvnias but may increase to 120 hryvnias.

It is noted that if a pack of cigarettes cost 100 hryvnias in 2024, it will cost 205 hryvnias by 2028.

Mikhail Polyakov, deputy general director for corporate relations at Philip Morris Ukraine, confirmed that packs could rise in price by an average of 30 hryvnias. However, he assured that the increase would be gradual — prices would change once or twice a month until manufacturers fully "pass on" the excise hike to consumers.

At the same time, Yuri Rylach, head of corporate and regulatory affairs at British American Tobacco Ukraine, pointed out that pricing is also influenced by other factors — the cost of raw materials, materials, electricity, and so on. Thus, the price increase will also depend on the type and brand of the product.

According to calculations by specialists from the NGO "Life," in 2025, a pack of cigarettes will cost 115 hryvnias, while "sticks" will cost 125 hryvnias. By 2028, the prices are expected to rise to 135 and 140 hryvnias, respectively.

We remind you that the National Bank has predicted whether utility tariffs in Ukraine will change during 2025.

Analysts reported that a quarter of Ukraine's pensioners receive up to 3000 hryvnias per month. The lowest average pension in the country is in the Ternopil region.