The budget is losing 28 billion hryvnias: Getmantsev identifies the main problem in the tobacco market
20 April 23:44
As of early 2026, the share of the illicit tobacco market in Ukraine remains consistently high at 17.6%. This means that nearly one in six packs of cigarettes on the market is illegal. This was reported by Danylo Getmantsev, chairman of the Parliamentary Committee on Finance, Tax, and Customs Policy, citing a Kantar study, according to "Komersant Ukrainian"
Despite a slight improvement compared to October 2025, when the figure stood at 17.8%, state budget losses from unpaid taxes are already estimated at 28.1 billion hryvnia per year.
The MP emphasized that while the situation has stabilized, it is too early to speak of a victory over the shadow market. According to him, current measures are insufficient, and the revamped Economic Security Bureau must demonstrate real effectiveness in combating underground production and the illegal sale of tobacco.
What scale has the illegal tobacco market reached?
According to Kantar Ukraine, at the beginning of 2026, the overall level of illegal trade in tobacco products stood at 17.6%. For comparison, in the fall of 2025, this figure was 17.8%, meaning the situation has hardly changed. This means that the shadow market remains one of the most serious challenges for the state budget and the legal business sector.
Budget losses from this volume of the shadow market are already estimated at 28.1 billion UAH per year, which is 1.6 billion UAH more than in the previous estimate. It was this figure that Getmantsev cited as one of the main arguments in favor of intensifying the fight against the illegal circulation of cigarettes.
Which segment of the illegal market is growing the fastest
Getmantsev paid particular attention to products that are formally labeled as Duty Free or intended for export but are actually sold illegally within Ukraine. The share of this segment has already reached 7.7%, whereas in October 2025 it stood at 6.2%.
According to published data, more than half of these products—57%—are linked to the Vynnykivska Tobacco Factory based on the labels on the packaging. Another 41% comes from Marshall Finest Tobacco. Media reports also specified that brands such as Compliment, Lifa, Marshall, Urta, Manchester, and Brut are present in this segment.
In which regions are the most illegal cigarettes sold
According to a Kantar study, nearly two-thirds of all illegal tobacco products in Ukraine are concentrated in just seven regions. The largest shares were recorded in:
- Dnipropetrovsk Oblast — 19%
- Odesa Oblast — 10%
- Kharkiv Oblast — 9%
- Kirovohrad Oblast — 9%
- Lviv Oblast — 8%
- Khmelnytskyi Oblast — 7%
- Kyiv and Kyiv Oblast — 5%
It is noted separately that Kirovohrad Oblast has appeared on this list of regions with the highest rates for the first time. This indicates a shift in the geography of the shadow market and its spread beyond traditionally problematic regions.
Where Illegal Tobacco Is Most Often Sold
The structure of distribution channels remains virtually unchanged. In 2026, 64% of illegal tobacco products are sold through kiosks and stores.
For comparison, in 2025 this figure was 65%. This means that the majority of sales continue to take place through retail channels familiar to consumers, rather than solely through shadow or closed channels.
Why this is a problem for the budget and the market
A high share of illicit tobacco deals a double blow to the state. On the one hand, the budget loses tens of billions of hryvnias in taxes. On the other, legitimate businesses are forced to compete with products sold at lower prices precisely because excise taxes and other mandatory payments are not paid.
What Getmantsev Proposes
Danylo Getmantsev believes that current countermeasures are insufficient. He called for intensifying the fight against underground production and illegal sales, and emphasized that the revamped Economic Security Bureau must prove its effectiveness in practice.
In essence, the point is that stabilization at 17.6% is not a positive result if the shadow market remains so large. This is no longer a matter of isolated abuses, but a systemic problem with tax and law enforcement policies.
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