During a busy session in parliament in the early hours of Nov. 23, Ukrainian lawmakers voted to approve amendments to the country’s tax code that extend tax cuts for electric car owners and increase the excise tax on tobacco products by 9 percent.
A total of 236 lawmakers voted in favor of the amendments, with 226 “for” votes required for a bill to pass.
The amendments will raise an extra Hr 6.3 billion ($225 million) for the budget, according to Finance Ministry estimates. Parliament also approved the 2019 state budget early on Nov. 23, with 240 lawmakers voting in favor.
The amendments mainly focused on environmental protection measures, exempting new electric cars from both value-added tax and the excise tax for the next four years, and raising taxes on tobacco producers and gas extracting companies.
The tax-cut for importing electric cars was first adopted in 2017 for one year. The new amendment extends the exemption from both VAT and customs duties on imports of new electric cars until 2022.
The tobacco industry, in contrast, will see an additional rise in tax rates, with parliament voting for a 9 percent increase in the excise tax on tobacco products. This new amendment will take force from July 1, and will add to the 20 percent increase adopted earlier.
In 2017, the government accepted an eight-year plan to bring Ukraine tobacco taxes to European levels. The legislation called for an additional 20 percent in excise tax, each year, on tobacco producers. The overall tariff will be 90 euros (Hr 2,880) per 1,000 packs, or 1.8 euros (Hr 58) per pack, by 2025.
Additionally, the parliament increased the rent rates for the mining industry by 2 percent. From Jan. 1, companies that mine resources below 5,000 meters will see their rent increase from 14 to 16 percent, while companies that mine fully or partially above the 5-kilometer mark will see an increase from 29 to 31 percent. Rent rates for iron ore extraction will increase from 8 percent to 8.8 percent.
The amendments also concerned carbon dioxide (CO2) emissions, forestry and new rules concerning parcels containing goods worth over 100 euros (Hr 3,200).
From Jan. 1, the CO2 emissions tax will rise by Hr 0.41 and will equal Hr 10/ton. The proposed plan includes a yearly Hr 5 increase until 2023. The forestry tax on the use of special forestry zones will increase by 50 percent from Jan. 1.
Lawmakers also voted in new rules for postal services: From July 1, packages worth over 100 euros will be taxed. However, the tax will only kick in if the value of the goods inside a package exceeds 100 euros.
