№ 9/2018

Fìnansi Ukr. 2018 (9): 60–72https://doi.org/10.33763/finukr2018.09.060

TAX POLICY

KOROTUN Volodymyr ¹, KOSHCHUK Tetiana ²

¹Research Institute of Fiscal Policy, University of State Fiscal Service of Ukraine
OrcID ID : https://orcid.org/0000-0002-6447-5916
²SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0003-1013-4603

Antidemping mechanism of stabilizing tobacco taxation revenue

The article investigates the experience of EU countries regarding the application of fiscal mechanisms for counteracting dumping in the tobacco market, which hinders the growth of cigarette prices, preventing the achievement of fiscal and regulatory goals of increasing excise duty. The authors analyze the legislative initiative of the Ministry of Finance of Ukraine aimed at limiting the legal prohibition of cigarettes, the maximum retail selling price of which, with the exception of taxes envisaged by the law, is lower than the minimum level of economically grounded indices of production and implementation costs, norms of tobacco profits companies in the context of European practice. It is proved that the introduction of the proposed antidumping instrument based on the application of coefficients to the maximum retail selling price and the minimum excise duty will reduce tax evasion and create preconditions for raising cigarette prices with the corresponding increase in VAT revenues, retail excise tax and, under certain conditions, ad-valorem excise duty and corporate income tax. It is substantiated that the advantages of introducing this excise duty in Ukraine are also: the reduction of the attractiveness of illegal tobacco exports to the European Union and the availability of cigarettes, which is important for restricting smoking; compliance with the provisions of the EU -Ukraine Association Agreement in relation to the implementation of Council Directive 2011/64/EU; effectiveness with a significant annual increase in excise rates (as opposed to the German analogue of the antidumping mechanism based on the use of the weighted average retail selling price of cigarettes); ease of administration; there is no need to adjust the relevant legislation because there is no binding to fixed amounts as regulated in Spain; improving the predictability of excise duty revenues and reducing the risk of budget deficit growth; restriction of unfair competition in the tobacco market.

Keywords:excise duty on tobacco products, excise policy, adaptation of national legislation to the requirements of the EU directives on excise taxation of tobacco products, fiscal mechanism for counteracting cigarette dumping, prevention of tobacco tax evasion

JEL: E62, H21, H26, H87

Korotun V. . Antidemping mechanism of stabilizing tobacco taxation revenue / V. Korotun, T. . Koshchuk // Фінанси України. - 2018. - № 9. - C. 60-72.

Article original in Ukrainian (pp. 60 - 72)

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