Tobacco manufacturers say why they raised cigarette prices

Head of Corporate Communications British American Tobacco Ukraine Andrew Krill commented about the fact that the major cigarette manufacturers are not waiting for the decision of the President, increased from November 1, the maximum retail prices for some brands of cigarettes.
"From November 1, the company actually declared the new maximum retail prices of some (but not all) of our brand," - he said.
Krill explained that taking such a decision, the company has tried, as far as possible, take into account the purchasing power and pricing factors such as excise tax, the cost of production, exchange rate fluctuations, inflation, etc.
"I want to emphasize that the proposed date of entry into force of the new excise tax rates set by Parliament in clear violation of Ukrainian legislation (excise rates will take effect from the date of official publication of the law that completely contradicts the requirements of Ukrainian legislation on the taxation system and is a glaring precedent)," - said he.
This decision continues to Krill, Parliament has put manufacturers in the extremely difficult conditions, when the existing order of declaration of prices would not give the possibility to display the new excise rates in current prices.
"In these circumstances, our decision to increase from November 1, the price of some brands was a balance between the commercial nature of the activities of our company, like any other business, and our desire to satisfy consumer expectations," said a representative of one of the largest tobacco producers in Ukraine.
As reported, according to the State Tax Administration, the largest cigarette manufacturers are not waiting for the decision of the President, raised from November 1, the maximum retail prices for some brands of cigarettes.

International experience shows the positive results of raising the excise tax on tobacco

Statistics of the number of people smoking in various countries shows that the decrease in the number of smokers can be successfully combated. One of the controversial topics among Russian experts is to increase the excise rates on tobacco and tobacco products.

Russia's experts argue that the increase in excise tax rates only temporarily make cigarettes less accessible and, simultaneously, will fill the budget. In their view, increase the price of tobacco products quickly leads to filling the market for smuggled goods. As a result, the flow of funds in the budget from the excise tax, only declining, the tobacco industry is going through difficult times, curtailing production and decreasing the amount of tax deductions. But most important: the smoker still get cigarettes for him at an affordable price.

Scientists do not agree with the experts and give us examples of New York. From 1 July 2002 excise tax on cigarettes was increased from 80 cents to 1.5 dollars. A year later, New York could boast that revenues in the budget grew by 10 times! The volume of sales fell by almost half.

At present, Russia has one of the lowest excise tax rates in the world: about 1 euro cents. For comparison, excise rates on tobacco in the UK is about 5 euros per pack. In the European Union set a minimum rate of excise tax (1,28 euro for a pack of cigarettes), which took all the new EU members.