REUTERS
The companies were also fined in Ukraine.
Former Ukrainian Economy Minister Viktor Suslov says the tobacco companies that have announced plans to leave the Ukrainian market over new legislation have paid about UAH 48 billion (US$1.9 billion) in taxes alone to the national budget.
Read alsoUkraine anti-trust watchdog imposes about US$265 mln in fines on investors – expert
"The four biggest payers [British American Tobacco, Philip Morris, Reynolds, and others] paid UAH 48 billion in taxes alone to the budget. They also made other contributions: pension [taxes] and large salaries to employees. Instead of saving this 'hen laying golden eggs' for Ukraine, the new government suddenly starts to oppress the foreign investors," he told 112 TV Channel on October 22.
In addition to the legislative initiative to limit trade markups, the companies were fined, which also affected their performance in Ukraine.
As was earlier reported, on October 4, the Verkhovna Rada, Ukraine's parliament, passed bill No. 1049 in the second reading to introduce a single account for the payment of taxes and fees provided by the Tax Code (except for VAT, excise tax, and customs duties).
The document was adopted with the amendment fixing the guaranteed margin for wholesalers and retailers selling tobacco products at at least 20% (from 7% for wholesalers and from 13% for retailers). Thus, after the adoption of the bill, cigarettes will rise in price by UAH 7-15 (US$0.28-0.60). This difference will not be channeled into the budget in the form of taxes, but will be used by retailers whose estimated profit is about UAH 15 billion (US$603.9 million) per year.