Ukrainian businesses urge tougher legislation against illicit excise trade
Ukrainian businesses are calling on parliament to urgently approve legislation strengthening the rules governing excisable goods. NV Business reports that the shadow market costs the state budget more than UAH 33 billion annually.
Businesses press parliament for urgent action
Ukrainian businesses are urging parliament to approve legislation intended to strengthen the regulatory framework for excisable goods and improve enforcement against the shadow market. According to NV Business, illegal trade in these products is estimated to deprive the state budget of more than UAH 33 billion each year.
The appeal puts the scale of the fiscal loss at the centre of the legislative debate. For companies operating legally, illicit sales also create a competitive imbalance: registered producers, processors, distributors and retailers must comply with tax and regulatory requirements, while unregistered operators can avoid part or all of those costs.
The business community is seeking urgent passage of a draft law rather than relying solely on enforcement under the current rules. The proposal is described as a measure to improve the legal framework governing the circulation of excisable goods and make action against the illegal market more effective. The available source material does not specify the bill’s provisions, penalties or timetable for parliamentary consideration.
Annual budget losses exceed UAH 33 billion
The estimate of more than UAH 33 billion in annual losses indicates that the issue extends beyond isolated violations. Excise revenue is collected through regulated supply chains, and a large shadow segment reduces receipts even when demand for the underlying goods remains in the domestic market.
Illicit circulation can affect several groups at once. The state loses tax revenue, compliant businesses face competition from untaxed goods, and wholesalers and retailers must assess the legal and commercial risks of their suppliers. Producers that have invested in compliant capacity may also find it harder to compete on price when illegal operators avoid excise obligations.
The reported figure is an estimate of the budget impact, not a breakdown by product category. NV Business’s report refers broadly to excisable goods and does not provide separate loss estimates for individual industries. It also does not state what share of the relevant market is considered illicit.
Implementation will determine the market effect
Passing legislation would be only one part of the response. Its commercial impact would depend on the final wording, the responsibilities assigned to enforcement bodies and the consistency of implementation. Businesses need rules that distinguish legitimate market participants from illegal operators without creating uncertainty for compliant supply chains.
More effective control could redirect sales toward registered channels and improve tax collection. It could also support producers, distributors and retailers that already account for excise duties in their costs. The size of any improvement, however, cannot be calculated from the information currently available.
Parliament’s handling of the draft law will therefore be closely watched by companies exposed to the excisable-goods market. The immediate business demand is clear: strengthen liability and update the regulatory framework so authorities can act more effectively against illegal circulation. With estimated annual budget losses above UAH 33 billion, the debate concerns both public revenue and the operating conditions faced by legitimate businesses.