Main points
- An underground workshop for the production of dangerous tobacco and alcohol was discovered in the Poltava region, and products worth about 50 million hryvnias were seized.
- Due to illegal activities, the budget received about 16 million hryvnias in taxes, and the organizer and 10 individuals were suspected of illegally manufacturing and selling excisable goods.
Businessman caught manufacturing dangerous tobacco and alcohol / Collage by Channel 24, photo by Pexels
A large-scale scheme for the illegal production of cigarettes and alcohol was exposed in the Poltava region. From the outside, everything looked like a regular business, but in reality, one of the co-owners of a tobacco company turned his enterprise into an underground workshop.
What is known about the underground production of cigarettes and alcohol?
During the searches, impressive volumes of products were found: 38 tons of tobacco raw materials, about 250 thousand packs of cigarettes, over 6 thousand liters of alcohol, and another 190 thousand counterfeit excise stamps, Prosecutor General Ruslan Kravchenko reported.
In addition, law enforcement officers seized complete production lines. In total, all this was estimated at approximately 50 million hryvnias.
Then the investigators began to conduct examinations and collect evidence. It turned out that the products were not only illegal, but also dangerous:
- Foreign impurities were found in the tobacco, it did not meet any standards.
- The alcohol also did not meet the requirements for vodka products.
According to the investigation, the organizer of the scheme was the co-founder of a legal tobacco company. It was he who set up clandestine production on the basis of his own enterprise.
The finished products were probably disguised as well-known brands. They sold them through their own people: some were transported by trucks for cash, others were sent by mail across Ukraine.
Due to such activities, the budget received about 16 million hryvnias in taxes. It is known that the organizer of the scheme and 10 other people were suspected of illegal production and sale of excisable goods.
How will the price of cigarettes increase in Ukraine?
The increase in excise duty on cigarettes in Ukraine is taking place within the framework of European integration. The changes in April will add 8-10 hryvnias to the price of a pack. Economist Oleg Getman said this in a commentary on Channel 24 .
According to the expert, the main excise tax increases are planned in the Tax Code and will take place in the coming years. Thus, the tax will approach the minimum rate of the European Union.
Oleg Getman
Economist, coordinator of expert groups of the Economic Expert Platform
In April, it's just a small technical increase. All major increases will be from January 1st of each year. They bring us closer to the minimum rate of 90 euros per thousand cigarettes. For 2025, we already have about 80 euros, 2026 – 86 euros, 2027 – about 90 and on the 28th we reach the minimum EU level.
As the economist explains, the April increase is technical, because the share of excise duty in the retail price of cigarettes is less than the required 60%. To reach the required level, a coefficient of 1.1 is applied to the minimum excise tax liability. Accordingly, the excise duty automatically increases by 10%.
According to Oleg Getman, each subsequent stage of excise tax increase will, on average, increase the price of cigarettes by approximately 15–20 hryvnias .
From the current price of a pack, they will increase by 20 hryvnias twice, and they should stop somewhere at this level. It will probably be no more than 200 hryvnias for a pack of good cigarettes,
– the expert suggests.
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