Due to the Harmonization of the Excise Tax on HTP, its Revenues to the State Budget Increased 6 Times in 2021

Advocacy Center “Life” has analyzed the results of revenue to the State Budget of Ukraine from excise duties on tobacco products in 2021.


In 2020 the Ukrainian Parliament harmonized excise duties on HTPs to the level of cigarettes in Law №466-IX. This decision eliminated the tax preference that existed for certain groups of tobacco products. Following of amendments to the Tax Code, from January 1, 2021, the excise tax rate for HTPs increased from 1139.76 UAH per kilogram of tobacco to 1456.3 UAH per 1000 units.  Also this will increase by a further 20% annually. According to the Tax Code of Ukraine, the excise tax rate for HTPs in 2022 is 1,747.6 UAH per 1,000 units and should reach the planned rate of 3,019.85 UAH by 2025.

An effective decision of the Parliament ensured a sixfold increase in revenue to the State Budget from excise duties on HTPs in 2021. According to the State Tax Service of Ukraine, excise duties on HTPs have increased from 1.7 billion UAH in 2020 to 10.2 billion UAH in 2021. Such revenue is close to the estimates of the Kyiv School of Economics, which predicted that tax duty fees from HTPs in 2021 could reach 11.3 billion UAH.

The sixfold increase in revenue to the State Budget of Ukraine from excise duties on HTPs, after its harmonization to the level of cigarettes, demonstrates the impressive effectiveness of the Parliament’s decision, which has become an example for the whole world. The increase in excise duties on HTPs has made them less affordable for children and young people, who are the main target of the tobacco industry in promoting the use tobacco products, which HTPs are. – noted Dmytro Kypura, executive director of Advocacy Center “Life”.


In 2020 HTPs were sold in Ukraine at prices ranging between 53 UAH and 60 UAH per 20 units. In 2021 they were sold at prices ranging between 65 UAH and 73 UAH per 20 units. The increase in excise duties on HTPs decreased their affordability, but didn’t lead to the creation of an illegal HTP market in Ukraine.


Despite the increase in excise duties and prices, the use of HTPs in Ukraine in 2021 continued to grow. This is explained by the fact that the current legislation didn’t provide any restrictions on marketing of HTPs and electronic devices for them. To solve this problem, in 2021 the Parliament of Ukraine passed the Law №1978-IX, which bans the use of HTPs in all enclosed places, public and work places, and also bans the advertising of HTPs and devices.

For the contact information:
Dmytro Polonskyi — media coordinator of Advocacy Center «Life» dmytro.p@center-life.org


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