At long last, after much talk in the Cabinet and Parliament, the government has resolved to increase the excise tax on wines and spirits from 3 to 7 ECU per liter, on filter cigarettes from 2 to 3 ECU, and on malt beer from 0.04 to 0.11 ECU per liter.
This obviously unpopular Cabinet decision is expected to be followed by price jumps: up to Hr 10.6 per liter of vodka; Hr 11.1 per liter of liqueur; up to Hr 16.00 per liter of cognac; Hr 32.14 per 1,000 cigarettes. The Cabinet's finance and financial market development department informed Interfax Ukraine that such excise increase, considering current demand, will secure Hr 385 million in revenue. Or maybe not, because habitual consumers – people with low incomes, as rule – will simply switch to moonshine, the more so that this country, like all former USSR republics, has quite an experience in combating dry laws and excessive vodka prices. And the same is true of cigarettes, remembering that domestic tobacco companies dread another upsurge in smuggled tobacco products. Another backfire in the making?






