Ukraine’s state budget may lose up to UAH 20 billion over the next three years due to a 25% excise tax preference for heated tobacco products compared to regular cigarettes. This year alone, the budget is expected to miss out on up to UAH 3 billion!

At a time when the draft State Budget for 2026 foresees a deficit of 18% of GDP, it is crucial not only to seek external financing but also to use domestic revenue sources effectively — including excise taxes on tobacco and nicotine products. Experts from the NGO “Life” are convinced of this.

Analysts note that the European Union is already preparing to raise the minimum excise tax on cigarettes to €215 and, for the first time, to set minimum rates for new nicotine products — heated tobacco (HTPs), electronic cigarettes, and nicotine pouches.

Given this, Ukraine must review its current excise increase plan now — both to strengthen the wartime budget and to prepare for the upcoming new EU minimum rates.

Earlier, NGO “Life” submitted its proposals to the Draft Government Action Program. The proposals outline a comprehensive set of measures aimed at overcoming the tobacco and nicotine consumption epidemic in Ukraine, particularly among children and youth.

The proposed actions are in line with Ukraine’s international obligations, notably the WHO Framework Convention on Tobacco Control (FCTC), and include EU integration provisions relevant to Ukraine’s accession process.

Specifically, they include:

1. Reducing tobacco product accessibility through excise tax increases;

2. Strengthening enforcement and anti-corruption measures;

3. Enhancing implementation of the WHO FCTC;

4. Ratifying the Protocol to Eliminate Illicit Trade in Tobacco Products.

Together with the gradual harmonization of excise rates for cigarettes, cigarillos, and heated tobacco products — up to €120 per 1,000 units by 2028 — these measures could save an additional 100,000 lives from premature death and generate extra revenue for Ukraine’s state budget.