29.08.2016
SUMMARY OF CABINET OF MINISTERS
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August 23

The Cabinet of Ministers raised tax rates for excisable goods, environmental tax and rent payments

The AUC supports these initiatives as they will increase local budget revenues

The Cabinet of Ministers considered the draft law "On Amending the Tax Code of Ukraine with Regard to Revisiting Rates of Certain Taxes" and revised the tax rates taking into consideration the consumer price index and producer prices. The following tax rates were revisited: excise tax, environmental tax and rent payments.

The Association supports these initiatives of the Cabinet of Ministers, as they will:

- will have a positive impact on local budgets;

- improve the environmental situation due to the increase in excise and environmental taxes; and,

- “de-shadow” unscrupulous producers and improve the quality of alcoholic beverages.

PULSE Project experts having analyzed the approved changes noted that raising will also have the following impact.

With regard to alcoholic beverages: This move will become an effective tool to combat illegal market, will serve as the source of revenues to local budgets and will reduce the consumption of tobacco products and alcoholic beverages. With regard to tobacco goods:  This move will enhance activities to combat cigarette smuggling will provide additional revenues to local budgets through increased excise tax, as well as will reduce the level of consumption of tobacco goods and improve public health.

With regard to the environmental tax: This will improve the environment and will reduce emissions of pollutants in the environment.

With regard to the use of radio frequency resource: This move contains certain threats and will not contribute to the development of new technologies and better communication. It can lead to increased tariffs, reduce operator revenues and budget revenues.

With regard to the use of mineral resources: This move will increase budget revenues, and will improve the balance and preservation of the natural environment.

Earlier, AUC was one of the organisations to initiate the revision of minimum prices and repeatedly provided government authorities with its proposals on how to resolve the problem issue

Revenues of local budgets will significantly decrease due to the growth of the shadow sector of the alcoholic beverage market. The Association of Ukrainian Cities appealed to the Prime Minister Groisman.

The Association of Ukrainian Cities is concerned about the potential reduction of local budget revenues due to a significant increase of the shadow sector of the alcoholic beverage market. The AUC appealed to the Ministry of Finance and Economic Development.

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