№ 10/2020

Ekon Ukr. 2020 (10): 19–33https://doi.org/10.15407/economyukr.2020.10.019

ECONOMIC MANAGEMENT: THEORY AND PRACTICE

УДК 336.226.331-047.64(477)

JEL: H26, H29, L66

NOVYTSKA Nadiia¹, KHLIEBNIKOVA Inna²

¹Research Institute of Fiscal Policy of the University of the State Fiscal Service of Ukraine, Research ID : http://www.researcherid.com/rid/AAH-4193-2020
OrcID ID : https://orcid.org/https://orcid.org/0000-0002-8238-4006
²Research Institute of Fiscal Policy of the University of the State Fiscal Service of Ukraine, Research ID : http://www.researcherid.com/rid/36053052600
OrcID ID : https://orcid.org/https://orcid.org/0000-0001-7265-9216

THE IMPACT OF UKRAINE'S EXCISE DUTY POLICY ON THE TRANSFORMATION PROCESSES OF THE TOBACCO MARKET

The market of tobacco products in Ukraine is one of the most dynamic and competitive. It develops under the influence of certain factors that cause structural changes, therefore, the aim of the article is to conduct a comprehensive analysis of transformation processes in the market of tobacco and their alternatives in Ukraine and identify the factors that cause them. The high level of tax burden and the proliferation of alternative products with a potentially lower risk to human health, including heating tobacco products and e-cigarettes, are key factors in the market’s transformation process. Their presence leads to an increase in illicit turnover of tobacco products, which accounts for 6.37% of the market, and the gradual replacement of cigarettes with alternative products, which account for 12.95%.
The presence on the market of products that are not taxed or taxed at lower rates is one of the reasons for the reduction of excise duty revenues. According to the results of 2019, the planned indicators of revenues were not met by 23.5%. Other reasons for non-fulfillment of excise duty revenues include: declining dynamics of the tobacco products market; reduction in the number of smokers; reorientation of «cheap whites» cigarette flows from Ukraine to neighboring countries; tax avoidance.
Prospects for further research are identified, namely the need to develop measures for state regulation and optimization of excise duty taxation of tobacco products and their alternatives, taking into account the risks to public health and increasing demand of illegal products.

Keywords:excise duty; tobacco; novel tobacco products and nicotine-containing products; electronic cigarettes; heating tobacco products; illicit turnover of tobacco products

Article original in Ukrainian (pp. 19 - 33)

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The article was received by the Editorial staff on July 23 , 2020

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