State smothers cigarettes

Because of the new excise Ukrainian production and consumption of tobacco fell by 20%
Yesterday it was reported the first results of government decisions to increase the tax pressure on the tobacco industry. According to industry association Ukrtyutyun ", c the entry into force of the new rates of excise duty on tobacco products in May this year, volumes of cigarettes domestic enterprises decreased by 21.5%. Manufacturers say consumers shifted to cheaper cigarettes and smuggling. The MPs argue that the Ukrainians have become less smoke. However, the data of sociological studies show that this has not happened.
According to the Association Ukrtyutyun ", in May and September the volume of cigarette production in Ukraine decreased by 21,5% - to 47.03 billion units. Since the beginning of the year the country produced 85.22 billion units. cigarettes against 98.77 billion units. year earlier. Note that prior to May drop in production due to the crisis, did not exceed 2%. According to the director general of the Association Valentina Khomenko, tobacco companies have been forced to reduce production because of declining demand due to rise in price due to recent increase in rates of excise duty.
Since May 1, entered into force on March 31 passed a law under which the ad valorem component of excise duty on tobacco products increased from 16% to 20% and specific - to 15,6 UAH to 35 grn/1000 pc. for unfiltered cigarettes and 37,5 UAH to 60 grn/1000 pc. to filter cigarettes. Specific rates from the beginning of next year should be indexed to inflation. In the summer of Cabinet proposed an increase in ad valorem rates again - by 36%.
One of the authors of the law on the existing rates of excise duty is the people's deputy Oleh Lyashko (BYT) believes that the negative dynamics of the volume of cigarette production shows a decline in consumption. "Reducing consumption is correlated with the decline in production. On any signs of increase in illegal sales are not talking "- sure MP. He also believes that achieved another goal of the law - increasing revenue to the state budget. According to the State Tax Administration, from the beginning of the volume of the excise tax on tobacco products increased compared to last year in 2,6 times - up to 5.7 billion UAH. "The amount of deductions, of course, less than we planned, but not by much," - says Mr. Lyashko.
Manufacturers do not share that view. "The decline in production at 20% due to a sharp rise in cigarette prices due to increases in excise duty in May. After the May price increase excise taxes on a pack of unfiltered cigarettes have been increased by 1,25-1,6 grn, a pack of filtered cigarettes - on 1,7-3 grn ", - said Director of Corporate Affairs" JTI-Ukraine "Dmitry Redko . As a result, Ukrainian consumers switched to cheaper cigarettes illegally imported from Russia and Moldova, according to Ms. Khomenko. In informal conversations, industry representatives say that the situation is more like 2000-2001, when every third pack of cigarettes sold in Ukraine, was contraband. Therefore, companies are starting to turn off the program on modernization of production and planning to reduce staff.
Import cigarettes from Russia and Moldova due to the fact that in these countries for manufacturers to create better conditions than in Ukraine. Gathering at the cheapest pack of cigarettes (worth 1,6 UAH to pay excise tax) in Ukraine is UAH 1.02 in Russia in terms of the hryvnia - UAH 0,42, and Moldova - 0,07 UAH. At the cheapest cigarettes with filter (3 UAH) in Ukraine - UAH 2, in Russia - 0,83 UAH, Moldova - 0,17 UAH. In association Ukrtyutyun "told that the Ministry of Internal Affairs have the data, according to which the first 8 months of this year in Ukraine, was apprehended smuggling tobacco products to 1.82 million UAH, which has 26 times more than the same period last year.
However, the head of the press service of the State Customs Svetlana Sudak said that attempts to export cigarettes from Ukraine more than attempts to import. "If we stopped and import smuggling of cigarettes, the generally cheap. On the contrary, it is from Ukraine illegally exported products ", - she said. This is explained by the fact that the minimum price of a pack of cigarettes in the EU countries is 5 euros.
Meanwhile, sociological studies show that the preferences of Ukrainian smokers has changed dramatically. According to the Institute of Social and Political Psychology of the Academy of Pedagogical Sciences of Ukraine, the number of smokers in Ukraine since 2004, only grows. However, according to a institution with 14 to 20 September poll, one third of respondents have shifted to cheaper, which means that lower-quality cigarettes, 5.8% - for products from neighboring countries. Thus 57% of respondents said that a further increase in cigarette prices could lead to what they buy illegal products from which taxes are not paid.