The interior Ministry will strengthen the fight against illegal cigarette market – Avakov

МВД усилит борьбу с нелегальным рынком сигарет – Аваков

Avakov announced the war on cigarette smuggling

Half of the Ukrainian retail and wholesale trade of cigarettes in the shadows. Also, the country became the largest supplier of cigarette smuggling into the European Union. The interior Ministry plans to put an end to this state of Affairs.

The Ministry of internal Affairs intends to strengthen the fight against illegal circulation of tobacco products in Ukraine. This was stated by the Minister of internal Affairs Arsen Avakov at a meeting of the Board of the interior Ministry on Friday, August 23, the press service of the Ministry.

“We must put an end to the contraband market of counterfeit cigarettes and the production of the Ukrainian factories”, he said.

Avakov gave analytical data KPMG, according to which Ukraine is the largest supplier of cigarette smuggling into the European Union. Thus one of the sources of illicit flows – the internal market of Ukraine.

“The share of illegal production of cigarettes in recent years has increased seven-fold, to almost 10%. The losses of the budget in 2018 amounted to three billion hryvnia. In addition, according to the GFS, about 50% of retail and wholesale trade of cigarettes in the shadows. According to our estimates, in 2018, led to losses in state and local budgets at the level of UAH 2.5 billion. According to preliminary calculations, the losses in state and local budgets for the six months 2019 already amounted to two billion hryvnia. And by the end of the year, the loss may reach four billion hryvnia,” – said Avakov.

In turn, the Deputy Chairman of the National police – the chief of Department of protection of economy Igor Copranet reported that to date the tobacco market there are two problems.

“The first is the admission by the transit of smuggled cigarettes in Ukraine and move them to Europe, the second is the existence of “grey” schemes of evasion from payment of taxes” – he said.

According to Kupradze, Department of protection of economy of Ukraine of Ukraine exposed “grey” the scheme of evasion from payment of the 5% excise tax upon tobacco products. Companies selling cigarettes, do not reflect in accounting the major part of products sold for cash, but instead reflect other groups of goods. Resulting from this scheme of shadow cash turnover legalized with the help of special conversion centers.

Copranet reported that the Department of defense of the economy has imposed arrests on account of 52 companies totaling more than a billion hryvnia.

Also the Deputy Chairman of the national police addressed to the Minister of Finance Oksana Markarova with a request to assist with the tax authorities in combating the illegal tobacco market.

We will remind, on August 21 on the border with Romania, found a truck with contraband cigarettes that were planning to illegally move to the EU.

And in the Kharkiv region have blocked the scheme of sale of counterfeit cigarettes and alcohol. The intruders had seized 32 thousand packs of cigarettes and 10 liters of alcohol.

 

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