Ukraine plans to cancel the requirement regarding minimum prices for cigarettes

The government proposes to Parliament to adopt a law according to which in Ukraine want to abolish the requirement to establish a minimum wholesale release and retail price of tobacco products, tobacco and industrial tobacco substitutes.

The bill envisaging changes in the Tax code has already been registered in the Verkhovna Rada.

In the Cabinet explained that the abolition of regulations regarding minimum prices for cigarettes is required by international obligations. In particular, the agreement on Association of Ukraine with the European Union.

“In the European Union legal relations concerning the taxation of excise rates for tobacco products and determination of maximum and minimum retail prices of tobacco products is regulated by EU Council Directive 2011/64/EU of 21.06.2011. The implementation of the Directive into the national legislation of Ukraine envisaged by the Association Agreement between Ukraine and the European Union. The introduction of the minimum wholesale release and retail prices on tobacco products contrary to provisions of EC Council Directive 2011/64/EU. The mechanism of minimum retail prices for cigarettes in past years was implemented in some EU countries and the decisions of the European Union 2000-2010 cancelled”, – stated in the explanatory Memorandum.

The government said that if Ukraine does not cancel the norm, the establishment of minimum retail prices on tobacco products are likely to be considered by the EU Commission and the EU Court as a violation of the competition and breach of obligations.

Recall that in late 2015 the Parliament adopted amendments to the Tax code, according to which the Cabinet has the right to set minimum and maximum prices for tobacco products.