The digitalization of the state greatly simplifies the work of everyone and reduces the amount of corruption in the country. Mintsifry plans to introduce eExcise in Ukraine.

The Minister of Digital Transformation explains that for many years there has been a significant shadow market in the country for alcoholic beverages and tobacco products. Due to the lack of a transparent mechanism for controlling the circulation of excisable goods, the state receives less taxes, and people receive fake and counterfeit products.

Ukraine annually loses a crazy amount from the budget

Fedorov gives an example that the sale of more than 50,000 bottles of alcoholic beverages with the same excise stamp was recorded. This means that 49,999 times people bought “burnt” vodka, or that sales did not go to the budget.

Also, according to the minister, there is a market in Ukraine for counterfeit paper excise stamps coming from China and Turkey. Products with counterfeit brands are sold through official distribution networks in Ukraine.

Such stamps are difficult to distinguish from real ones without a special examination. Of course, excise tax is not paid for such products. Accordingly, the state loses funds. According to Kantar and Euromonitor international, due to the shadow market of these excisable goods , Ukraine loses more than 30 billion hryvnias of the state budget annually.

How the digital excise tax will work

Now the Parliament is preparing bills 8286 and 8287 for the second reading. Their adoption will help the state develop honest and transparent business rules, bring the excise market out of the shadows and systematize control over the circulation of excisable goods.

We are creating a unique electronic system for the Ukrainian market. On the one hand, it takes into account the principles of European directives, and on the other hand, the needs and problems of the Ukrainian market. The European Tobacco track and trace system, which has been operating in the EU since 2019, was taken as a basis,” writes Fedorov.

Consequently, all operations for the transportation, storage, sale of each unit of production will be recorded in the electronic system. The key element of the system will be an electronic excise tax stamp. This is a unique code that will be applied to the product.

Note! eExcise is an important anti-corruption project that completely changes the functioning of the whole sphere. A transparent electronic system after the pilot can be scaled to other product groups. Digitalization will work for both the state and the consumer, and will also remove bureaucracy for business.

According to the minister, the introduction of the eExcise will make it harder to sell products with counterfeit excise stamps in stores. After the launch of such a system, each consumer , having read the code on the product through the Action, will be able to check alcohol and cigarettes and determine whether it is an original product or a fake.

The introduction of an electronic system is to reduce the volume of the illegal market for these products and increase budget revenues from excise tax by 15%.

Mikhail Fedorov claims that the eExcise will start working in Ukraine from January 1, 2025 , if adopted by the Parliament.