Ukraine's Budget Loses Approximately ₴30 Billion Annually Due to Shadow Tobacco Market - Ministry of Digital Transformation

In Ukraine, the national budget suffers considerable losses each year from the shadow tobacco market, amounting to approximately ₴30 billion. This alarming figure was revealed by Zoryana Stetsyuk, the Deputy Minister of Digital Transformation, during an interview with Ukrainian Radio, as reported by Ukrinform.

Stetsyuk emphasized that numerous studies support this information, with data from the company Kantar frequently cited. She explained that when aggregating the results of these studies, it is generally accepted that Ukraine's budget loses about ₴30 billion due to the illegal circulation of tobacco products.

It is crucial to note that this issue pertains to the shadow market, where products are sold outside of legal circulation. "The routes and destinations of these products are another story, but the fact remains that nothing has been paid on them, and they have not undergone the official circulation procedures within Ukraine," Stetsyuk clarified.

She also reminded that the electronic excise stamp system is currently operational in test mode. This system allows for the generation of electronic stamps, enabling anyone who scans a unique code in the 'Diia' application to access comprehensive information about the product, from the manufacturer to the store where it is sold.

The mandatory use of electronic excise stamps will come into effect on November 1 of this year. However, transitional stock that still bears paper stamps can be sold until mid-2027.

Meanwhile, representatives from the Ministry of Digital Transformation urge all market participants not to delay and to connect to the new system as soon as possible. "The sooner this happens, the more time there will be to address any nuances and ensure everything is in order by November 1," added the Deputy Minister.

As previously reported by Ukrinform, the Verkhovna Rada of Ukraine has extended the testing period for the electronic excise system until October 12, 2026, with the official launch expected on November 1.

The electronic excise project is being implemented by the Ministry of Digital Transformation in collaboration with the Ministry of Finance and the State Tax Service. Support measures for the implementation of the electronic excise system are being carried out under the 'Support for Digital Transformation' project, with assistance from USAID and UK Dev. Project partners include the Eastern Europe Foundation and the Institute for Analytics and Advocacy.

Photo: Andres Siimon on Unsplash

Join our channels on Telegram, Instagram, and YouTube.