№ 2/2020

Fìnansi Ukr. 2020 (2): 38–54https://doi.org/10.33763/finukr2020.02.038

TAX POLICY

KOSHCHUK Tetiana ¹

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0003-1013-4603

Theoretical grounds and experience of taxation of the novel nicotine-consuming products in EU countries: conclusions for Ukraine

The article outlines modern scientific approaches to the excise taxation of tobacco products in general and the theoretical foundations of levying excise tax on Heat-Not-Burn tobacco products and E-cigarettes in the context of the tobacco market transformation. It involves an analysis of European Commission recommendations and the experience of EU countries in the excise taxation of these novel nicotine-consuming products, as well as legislative changes relating to the collection of excise tax on these products in Ukraine. It is established that the decision taken by the national legislator to quadruple the excise tax rate for Heat-Not-Burn tobacco products starting from 2021 per 1000 units of production, as the case for cigarettes, and not by a unit of weight expressed in kg contradicts scientific approaches and European taxation practice for this category of novel tobacco products. This novation also neglects considering the negative economic impact of previous significant increases in excise rates in Ukraine without a corresponding increase in budget revenues in the expected amounts. It has been established that relatively low excise tax rates for Heat-Not-Burn tobacco products and E-cigarettes are means of preventing the tobacco market from further entering the shadow economy in response to dynamic increases in excise tax rates on cigarettes and problems in the field of tax administration. This requires the abolition of amendments to the Tax Code of Ukraine regarding changes to the mechanism of excise taxation of Heat-Not-Burn tobacco products, as well as further research on the trends and particular characteristics of the domestic E-cigarette market in order to form a reliable information base for the development of scientifically sound recommendations for excise taxation of these products.

Keywords:tobacco products, Heat-Not-Burn tobacco products, E-cigarettes, excise tax, tobacco market

JEL: E62, H25, H26, H27

Koshchuk T. . Theoretical grounds and experience of taxation of the novel nicotine-consuming products in EU countries: conclusions for Ukraine / T. . Koshchuk // Фінанси України. - 2020. - № 2. - C. 38-54.

Article original in Ukrainian (pp. 38 - 54)

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