Packs of cigarettes will have chips on them

According to the new rules, packs and blocks of cigarettes will have electronic 12-symbol code of letters and numbers automatically generated from a number of combination approaching infinity (Codentify technology). Every code has the encrypted information about the date, time and place of production, manufacturing line, maximum retail price, and excise tax charge. All the information will be delivered online to the server of the Ministry of Revenue and Duties. It means that the Ministry will be able to control the amount of tobacco production, the amount of charges, and excise tax payment. Also electronic excise stamps will allow confirming the authenticity of tobacco products and monitor their movement in the supply chain. It is planned that with the time producers will completely refuse paper excise stamps. However, such innovations require significant expenditures. Only the server for the ministry that will receive the information from the producers is estimated at 50,000 euros.

By introducing electronic excise stamps the government is planning to achieve two goals: to tackle the illegal traffic of tobacco products and increase the revenues from selling them. “We have to switch to the electronic excise stamps that will allow us to make a pass in this direction. For this we have to walk the talk. We have planned to see these systems work on November 18. That is why I think that these strategies will help us significantly reduce the number of these [counterfeit. – Ed.] products. We realize that they will still exist but their number will be reduced to the limit,” the Minister of Revenue and Duties of Ukraine Oleksandr Klymenko said. Previously he emphasized that 9 to 10 percent of tobacco products in Ukraine are counterfeit. “Previously this number was even bigger. However, from the beginning of the year we managed to reduce it,” he remarked.