Excise tax rates will double in 2016.

In late December last year the Verkhovna Rada adopted amendments to the Tax Code, which greatly increase the excise tax on alcohol. Excise duties on beer, fortified wines, vermouth and sparkling wines will double. On strong alcoholic drinks excises will grow in one and a half time, and on low-alcohol beverage will triple! 

The alcohol excise rate will double to UAH 141.06 for 1 liter of 100% alcohol. In 2015 this excise tax was levied at a rate of UAH 70.53. Further the excise is planned to rise for 5% every year until 2020.

In the government assert that the next growth of excise duties will bring billions of hryvnia to the budget. Manufacturers of excisable products consider that such steps lead to a further decrease in production up to 30%, a rise of product prices and an increase in the shadow market.

Manufacturers of strong alcohol proposed to raise the excise on 15%, which would help to keep vodka production at the level of 2015 and to get the desired result in the form of tax revenues. But the Cabinet did not consider their offer and has increased the excise on 50%. According to preliminary estimates, the price of 0.5 liter bottle of vodka with all paid taxes will increase by UAH 17 – 20 and will be approximately UAH 75.

Under increasing of the excise tax, rising of production costs and reducing in population's consumer capability, a shadow on market and quantity of counterfeits will increase. It not only fatally influences national economy, but also affects the health of Ukrainians. According to experts, a consequence of the increase in excise tax rates may be an overall reduction in staff in the alcohol and related industries to 0.5 million, state budget loss - about UAH 1.5 billion annually.

Based on delo.ua