Removing tobacco market from shadow may add UAH 15-17 bln to state budget – MP Hetmantsev

KYIV. April 7 (Interfax-Ukraine) – Head of the Verkhovna Rada Committee on Finance, Tax and Customs Policy Danylo Hetmantsev sees a significant potential for additional revenues to the state budget of Ukraine in the event of a significant increase in the fight against the shadow market of excisable goods, especially tobacco products.

“Of all the excisable industries, we see the greatest potential in removing the tobacco industry from the shadow. It is about UAH 15-17 billion,” he said in an interview on Radio NV.

According to him, the potential in the fuel market is also great.

“As for vodka, the potential for de-shadowing is less here since the total amount of excise tax on alcoholic products is about 10 times lower than for tobacco. Although there is a certain reserve for alcoholic products in removing them from the shadow,” Hetmantsev said.

The head of the committee said that shadowing and tax evasion in the tobacco market occur not at the level of its leaders but at the level of smaller companies and illegal producers.

He recalled that the tobacco industry consists primarily of four large international manufacturers which are not suspected of tax evasion because if this happens, the risks of such evasion for them will not be commensurate with the benefits.

“And we see, in fact, by their tax behavior that it deserves trust. These are market leaders, these are honest companies, these are companies that pay taxes in full,” Hetmantsev said.

At the same time, he said, some smaller Ukrainian tobacco companies are suspicious.

“There are some legal producers who raise doubts about their compliance with taxation rules. In particular, there is a tobacco factory in western Ukraine, where the Bureau of Economic Security (BES) recently conducted searches and found excisable goods without excise stamps worth UAH 80 million,” he said.

He added that there are also some small legal production facilities on the market that do not significantly affect it, but there is still a significant part of the market – illegal producers, even without a license. “For example, recently the Odesa customs office detained and confiscated a line for the production of cigarettes, which they tried to illegally import into Ukraine under the guise of a line for the production of soap,” Hetmantsev said, citing an example.

At the same time, the head of the relevant parliamentary committee stressed the inadmissibility of tax evasion during the war.