Cigarettes in Ukraine: how much does it cost to smoke in 2025 and what will happen to tobacco prices
11 March 2025 18:35
Starting April 1, 2025, Ukraine is expected to see another price increase for tobacco products. This is due to changes in tax legislation that will affect cigarette manufacturers and importers, "Komersant Ukrainian" reports, citing the State Tax Service of Ukraine (STSU).
The price increase stems from the introduction of a 1.1 multiplier in the calculation of the minimum excise tax liability, which will lead to an increase in the cost of products on store shelves.
Why are cigarettes getting more expensive?
Ukrainian legislation provides for a gradual increase in excise taxes on tobacco products to bring prices closer to European standards and reduce smoking among the population.
According to the State Tax Service of Ukraine, in 2024, the share of excise tax liabilities in the weighted average retail price of cigarettes was 55.8%, which is lower than the 60% level required by law. In this regard, the government has decided to temporarily increase the excise tax by setting an adjustment coefficient of 1.1 from April 1, 2025 to December 31, 2025.
How will this affect prices?
The excise tax increase will lead to a proportional increase in the retail price of cigarettes. Experts predict that prices for popular brands may increase by an average of UAH 5-10 per pack.
It should also be borne in mind that the Ukrainian tobacco market is gradually moving towards EU standards, where cigarette prices are much higher. For example, in Poland, the average price of a pack of cigarettes is about 6 euros (270 UAH – ed.), and in Germany it is about 8 euros (360 UAH – ed.).
Who will be affected by the excise tax increase?
The new tax rules apply to all manufacturers and importers of tobacco products. The following categories of goods will be affected:
- cigarettes with a filter
- cigarettes without a filter;
- tobacco sticks for heating systems.
The changes will also affect companies importing cigarettes from abroad. They will also have to take the increased excise tax into account when calculating the cost of production.
What is the purpose of the excise tax increase?
The government of Ukraine sees the increase in tobacco prices as a way to combat smoking. According to the WHO, raising the cost of cigarettes is one of the most effective methods of reducing the number of smokers.
In addition, an increase in excise taxes is a way to replenish the state budget. In 2024, tax revenues from tobacco products amounted to more than UAH 70 billion, and this amount is expected to grow in 2025.
What are the consequences for the market
1. Increase in prices on the black market. Rising prices for tobacco products may lead to an increase in the share of counterfeit and illegal cigarettes. In 2023, the share of the illegal cigarette market in Ukraine was about 20%, and experts fear that this figure may increase.
2. Falling demand for expensive brands. Ukrainian smokers may start switching to cheaper brands, which will lead to changes in consumer preferences.
3. Decrease in smoking rates. The rise in the price of tobacco in Ukraine in recent years has already led to a 15% decline in cigarette consumption, and this trend may continue.
What to expect next?
According to the legislative plan, Ukraine will continue to increase excise taxes on tobacco products annually until 2028. This means that the price of cigarettes will continue to rise, gradually approaching European standards.
How much do cigarettes cost in Ukraine now?
As of March 2025, cigarette prices in Ukraine vary depending on the product class and brand. As a result of the excise tax increase, the cost of cigarettes has increased. Average prices for a pack (20 cigarettes) are as follows:
- domestic brands with a filter – about UAH 95
- middle class cigarettes – about UAH 104
- premium cigarettes – about UAH 122.
It should be noted that these figures are averages and may vary depending on the specific brand and region of sale. It is expected that cigarette prices will gradually increase through 2025 due to further excise tax increases and inflationary processes.
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