Excise taxes on tobacco products have risen sharply: when and by how much will cigarettes become more expensive.

According to the 'Inflation Report' from the National Bank of Ukraine for April 2025, the law on increasing excise taxes on tobacco products anticipates a significant increase in rates specifically in 2025, which will inevitably lead to an increase in cigarette prices.

Producers and importers of tobacco products have been gradually raising prices for some Time, anticipating the planned increase in excise duties and their conversion to euros, which came into effect at the end of March 2025, reports 'Hvylya' citing NBU documents.

The NBU report notes that according to the approved schedule, a significant increase in excise tax is expected only in the current year of 2025, while during 2026-2028 the growth of excise taxes will be moderate.

An additional factor affecting the price of cigarettes is the introduction of an increasing coefficient of 1.1 for calculating the minimum excise tax liability, which will be in effect from April 1 to December 31, 2025.

'It is expected that this will lead to a gradual increase in retail prices as supplies of excise stamps purchased before the specified tax changes are depleted,' commented the National Bank.

According to the NBU, the need to apply this coefficient is due to the fact that in 2024 the share of the total amount of tax liabilities from excise tax in the weighted average retail price of cigarettes was below the normative level of 60%.

Recall that the Verkhovna Rada of Ukraine approved the legislative act for increasing the excise tax on tobacco products in December 2024.