Ukraine not to increase excise tax on alcohol in 2019 – EBA

The Verkhovna Rada, Ukraine's parliament, does not plan to increase excise tax rates on all alcoholic beverages in 2019.

"Today, the Verkhovna Rada has considered the issue of excise tax rates on alcoholic beverages. It doesn't plan to change them in 2019," the press service of the European Business Association (EBA) said in a statement on November 8.

Read alsoVodka, brandy production in Ukraine declines in four months

The EBA is referring to the draft law on amendments to the Tax Code of Ukraine and some other legislative acts on improving administration and revising the rates of certain taxes and fees, which was passed by the parliament in its first reading. As reported, this involves all types of alcoholic beverages.

In addition, the EBA Committee on Import and Trade in Alcoholic Beverages stressed that the share of the illegal market for alcoholic beverages in Ukraine continues to grow, while another increase in excise tax rates would only contribute to this process.

According to the State Statistics Service, more than 50% of strong drinks in the Ukrainian market are illegal.

"Today, Ukrainian illegal producers earn 100 times more from one bottle of vodka than the official ones. So, legal businesses are sustaining serious losses," the EBA said.

What is more, the quality of counterfeit alcohol often does not meet the minimum food safety requirements, according to EBA Wine and Spirits Committee Manager Christina Linichenko.

"Doctors say more than 10,000 people are hospitalized annually because of poor-quality alcohol. Therefore, the policy of the state should primarily focus on measures to stop trade in counterfeit alcohol and carry out its disposal in a transparent way," the press service quoted Linichenko as saying.

The EBA added that the business community hopes for the final adoption of the document without a change in alcohol rates. This will allow legal producers to ensure a slowdown in production decline, while the country will be able to resolve the situation with illegal alcohol in the market.

As UNIAN reported earlier, the amount of counterfeit alcohol in Ukraine in 2018 has almost doubled in comparison with the past year.