Verkhovna Rada passed a law on a new mechanism of excise duty on alcohol: will the price of alcohol rise?
10 October 2024 11:07
ANALYSIS
The Parliament has adopted as a basis and in general the Draft Law No. 12038-1 on amendments to the Tax Code of Ukraine and other laws of Ukraine regarding the specifics of excise taxation of ethyl alcohol and bioethanol. According to one of the authors of the draft law, MP Danylo Hetmantsev, this initiative is aimed at improving the tax legislation of Ukraine in terms of ensuring full payment of excise tax by producers of ethyl alcohol and bioethanol and is intended to prevent the use of shadow schemes for their sale.
“The draft law provides for a new procedure for determining tax liabilities on excise tax by producers of ethyl alcohol and bioethanol, taking into account the guaranteed tax liability on excise tax, which means the amount of tax liability on excise tax calculated on the basis of the maximum productivity of equipment for the production of ethyl alcohol and bioethanol,”
– the MP wrote in his Telegram channel.
What exactly will change with the adoption of such a law and whether Ukrainians should expect an increase in alcohol prices – we looked into "Komersant Ukrainian".
The essence of the law
According to the new rules, producers of ethyl alcohol and bioethanol in Ukraine must take into account the guaranteed tax liability (GTL) when determining their excise tax liabilities. The GST is calculated based on the maximum productivity of the equipment, the number of days in a month and the excise tax rate in force at the beginning of the reporting period.
The formula for calculating the Gross Production Rate:
GHT = Ob x K x St, where:
– Vol – volume of alcohol produced in litres.
– K is the number of days in the reporting month.
– St – excise tax rate.
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Business entities holding production licences are required to provide a calculation of the maximum productivity of their equipment before starting their activities and update it in case of changes.
Failure to comply with these requirements may result in the termination of the licence, and a new licence can be obtained only one year after such a decision.
How the law will affect the price of alcoholic beverages
According to economic expert Oleg Pendzin, the new law will definitely affect the price of alcoholic beverages.
“Undoubtedly, the adoption of this draft law will affect the price of alcoholic beverages. Its adoption goes hand in hand with an increase in excise taxes on alcohol. It is also part of the European integration process. Everything is rising in price in Ukraine, including prices for alcoholic beverages,”
– pendzin said in an exclusive comment .
The expert noted that the adoption of this law will increase the minimum price of alcohol regulated by the state.
“The state, by setting a minimum price for alcohol and regulating these things, is trying to protect itself from non-competitive behaviour, counterfeiting and smuggling that enters the Ukrainian territory. Setting a minimum price for alcohol allows legal producers to be at a price that will cover their costs. So, when we talk about prospects, they will be clearly under the control of the state, no one will raise the price tomorrow, because they will immediately be out of competition. However, this law will increase the minimum price,”
– pendzin said.
Draft Law No. 12038-1 will now be sent to the President of Ukraine for his signature.
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Author: Alyona Kaplina
