In Ukraine, about 50% of the alcohol market is in the shadow, CEO of Nemiroff Yuriy Sorochynsky says.
“About 50% of the market is in the shadows. Excessive fiscalization of certain business processes leads to the emergence of shadow economy, which sells the product to the consumer at a price (tax-free) at the level of UAH 35 – UAH 40 per bottle (vodka 0.5 liter), when the price of a legal product is UAH 89,” he said during the online business forum “From Shadows to Transparency” of the European Business Association on Monday.
Sorochynsky said that the shadow market is currently estimated at about UAH 10 billion – UAH 12 billion.
“Our level of fiscalization of alcoholic drinks is one of the highest in the world. In Europe, the average taxation of alcoholic drinks is 23-25%, depending on the country. We have only 43% at the producer level. Additionally, there is another 5% retail excise tax on each bottle sold legally. We have high taxation, which creates unfavorable conditions for business,” the expert said.
He said that in order to combat the grey market in Ukraine, it is necessary to strengthen control over the production and circulation of alcohol, introduce branded control over the circulation of alcoholic drinks and an electronic consignment note.
As reported, on December 11, 2019, President of Ukraine Volodymyr Zelensky signed a law on the abolishing of the state monopoly on alcohol production from July 1, 2020, adopted by the Verkhovna Rada on December 3, 2019.
