Currency
Cigarette prices in Ukraine will be recalculated. Source: photo created with the help of AI
Starting January 1, a new cigarette excise tax will be introduced in Ukraine (the law is signed by the President). It is excise taxes that have the greatest impact on prices, and they were pegged to the euro after the approval of Bill 11090 on December 4. OBOZ.UA has calculated how the price of cigarettes will increase (a pack of medium segment will rise by UAH 28.6) due to the introduction of the new excise tax. In the calculations, we used the current dollar to euro exchange rate, as well as the IMF's forecast of the dollar's growth in Ukraine.
This was reported in an article by OBOZ.UA. It is also taken into account that the excise tax (a condition of the directive) is 60% of the cost of the pack. These are approximate estimates that may change if the dollar appreciates or depreciates against the euro, and if the IMF's forecast for the hryvnia exchange rate turns out to be wrong.
The price of a pack of middle-class cigarettes may rise by about UAH 28.6 in 2025, to UAH 124.7. Prices will not rise immediately. The fact is that shops, supermarkets, and even factories have a certain stock of products. Therefore, in January, Ukrainians will buy cigarettes that were manufactured and excise duty was paid in December.
In 2028 (the excise tax increase will continue until 2028), if we follow this model, the cost of a pack will reach about UAH 160.5. According to the Ministry of Finance's calculations, the budget can additionally receive about UAH 612 million in 2025, UAH 5 billion in 2026, UAH 9.3 billion in 2027, and UAH 13.8 billion in 2028.
The excise tax on gasoline will also increase. Thus, in 2024, an excise tax of EUR 0.2135 will be paid per liter of gasoline, and starting from 2025, EUR 0.242. Accordingly, a liter of gasoline may rise in price by about UAH 1.2. However, the rise in price will be gradual, given the stocks of gasoline for which the old excise tax has been paid. By 2028, a liter of gasoline may rise in price by about UAH 6.22 only due to the excise tax (excluding the impact of devaluation, market situation, import prices, etc.)
As OBOZ.UA previously reported, Ukraine was urged to increase excise taxes on tobacco products by the European Commission as part of its report on EU candidate countries. The document, among other things, stated that Ukraine needs to harmonize the classification of tobacco products and excise duty rates in accordance with EU standards.
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