The Cabinet signed a Memorandum with the tobacco companies

Tymofiy mylovanov and the tobacco companies

The first achievements from the signing of the Memorandum can be seen in a year, I think top managers of the tobacco industry.

The Cabinet of Ministers signed with the tobacco manufacturers a Memorandum of understanding to ensure stability on the market of tobacco products. This was the night before, reported the press service of the Ministry of economic development, trade and agriculture.

“A Memorandum of intent to ensure stability on the market of tobacco products and maintaining a competitive environment for all participants” signed by Minister of economic development, trade and agriculture Tymofiy mylovanov and the major tobacco manufacturers operating on the territory of Ukraine”, – stated in the message.

Among the signatories: British American Tobaco, Imperial Tobaco Ukraine, Japan Tobaco International, Philip Morris.

“The Memorandum signed today is an important step for the development of fair competition in the market. Expected that due to the signed document, we will create a level playing field in the market, will counteract illicit trade and tax evasion,” – said the Minister of Economics Tymofiy mylovanov.

In the Memorandum, in particular, speaks of the intentions of the discussion of the change in methodology administration of a 5% tax on the retail sale of tobacco products, development of proposals regarding the licensing conditions for the exercise of wholesale trade in tobacco products, the introduction of a system for tracking the movement of tobacco products.

In the near future together with representatives of the tobacco industry will create a working group to develop tools for the implementation of the provisions of the Memorandum. While the tobacco industry noted the undeniable positive from the signing of the Memorandum.

So, according to the top managers of the industry, the first achievements from a strategic and a constructive position of the parties can be observed in a year. We are talking about increasing revenues and projected development of the tobacco industry.

We will remind, on October 7 the Verkhovna Rada adopted the bill No. 1049. It has obliged manufacturers and importers of tobacco products to sell their products to wholesalers at prices not exceeding 80% of the maximum retail prices including VAT and excise duty until 1 January 2021. The wholesalers engaged in the sale of these products must implement the products of the entities of retail trade in tobacco products at prices not exceeding 87% of the maximum retail prices for tobacco products.

For violation of the requirements regarding the prices of sales of products a manufacturer provides for a penalty of 100% of the cost of sales but not less than 200 thousand hryvnia, when implemented by the wholesaler not less than 100 thousand hryvnia.

After that, the tobacco companies said the risk of closure of their factories in Ukraine in connection with the legal settlement of trade margins on cigarettes. This issue was discussed during a meeting of President Vladimir Zelensky with representatives of the largest tobacco manufacturers in the country.

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