Will disposable e-cigarettes in Ukraine be subject to excise tax?

Will disposable e-cigarettes in Ukraine be subject to excise tax?

According to reports from overseas, will Ukraine impose an excise tax on disposable e-cigarettes?

According to the Ukrainian Babel website, the Dnipropetrovsk regional office of the tax service has issued a reminder that disposable electronic vapor products will be subject to excise tax in the future. This is likely to impact disposable products in Ukraine and also target illegal disposables.

Recently, Ukrainian President Volodymyr Zelenskyy signed Bill No. 8287, which introduces an electronic excise tax stamp for tobacco products and electronic liquids starting January 1, 2026.

This scheme will enable tracking the flow of alcoholic beverages, tobacco products, and electronic liquids from manufacturers/importers to end consumers. It will also ensure the integrity and timeliness of excise tax payments for such goods. Does this mean that Ukraine will introduce an excise tax on electronic vapor products in three years, along with a traceability system, and that mandatory labeling for alcoholic beverages and tobacco products will also be implemented in the country?

(Introduction of excise tax)

The imposition of excise tax on electronic vapor products will be a further step for Ukraine in regulating the market.

In July of this year, Ukraine announced that starting July 11, flavored electronic nicotine delivery systems (ENDS) products, other than tobacco flavor, would be banned.

Additionally, starting January 11, 2024, it will be required to use a combination of text and image warnings covering 65% of both sides of the packaging. The penalty for violations will be 30,000 Ukrainian Hryvnias (approximately $812), with subsequent violations incurring a fine of 50,000 Ukrainian Hryvnias.

Ukraine, a country with a population of over 40 million, has a significant number of tobacco consumers, with at least 6 million consumers, and over 2 million potential electronic vapor users. From another perspective, it can be said to be one of the largest electronic vapor consumption regions in Eastern Europe, where brands like VapeBros, J WelL, VapeOnly, and JOYETECH are quite active in the market. It is also an important HNB market, with Philip Morris International establishing factories in Ukraine.

More importantly, like many European countries, disposables have quickly taken over the Ukrainian market.

Due to different sales channel networks, disposables provide supply for many electronic vapor users, partly because open system products are difficult to sell in convenience stores dominated by self-service and quick transactions. However, as a semi-legal product, disposables offer a choice.

It can also be seen that the restrictions in the Eastern European market are mainly focused on taxation, combating illegal activities, and regulating usage scenarios, which will create a new operational system distinct from Western Europe. Chinese companies targeting the Eastern European market need to pay close attention to these developments.