29 Apr 2009

Raising tobacco taxes will help curb the growing tobacco epidemic in Ukraine and bring revenues to the national budget, according to a report released on April 29, 2009 in Kyiv.

The report, distributed by the coalition of non-governmental organizations “For Smoke-Free Ukraine” and prepared with support from a group of leading international specialists finds that a recommended tax increase to 70 percent of retail price could prevent up to 497,000 deaths related to smoking in this generation of Ukrainians.

The report is one in a series on tobacco economics in various countries funded by Bloomberg Philanthropies and the Bill and Melinda Gates Foundation as part of the Bloomberg Initiative to Reduce Tobacco Use.

In May 2009, Ukraine will increase its tobacco tax rate to approximately 60 percent of the retail price. However, experts agree the tax increase should go further.

The report recommends a tobacco tax increase to at least 70 percent of the retail price to meet World Bank and European Union levels of taxation. The report also calls on Ukrainian authorities to invest a significant portion of the tobacco tax revenue in tobacco cessation and public health.

The most effective way to reduce tobacco use is to raise the price of tobacco through tax increases that are large enough to affect retail prices.  Tax increases are recommended by the World Health Organization as part of a package of interventions to reduce tobacco use.

Called the MPOWER package, these solutions help combat the tobacco epidemic and protect citizens from the harmful effects of tobacco. Ukraine is obligated to increase tobacco tax rates under the Framework Convention for Tobacco Control, the world’s first international treaty devoted entirely to public health.

This treaty provides a road map for successfully reducing tobacco use if rigorously and fully implemented. 

Ukraine’s smoking rate is among the highest in the world, with more than 66 percent of adult males and more than 20 percent of adult women smoking. Tobacco-related diseases are responsible for approximately 115,000 premature deaths in Ukraine each year and contribute substantially to the country’s declining life expectancy and population decline.

The release of the study on tobacco economics is supported by leading Ukrainian economic experts and the World Bank.