Key points:
The Internal Revenue Service of Ukraine, in cooperation with law enforcement authorities, has stepped up efforts to combat the illegal circulation of tobacco and tackle the 12.6 percent black market.
Since the beginning of 2025, 1,069 inspections have been conducted, fines of more than $260,000 have been imposed, 312 business licenses have been revoked, and illegal products worth $60,000 have been seized.
The electronic consumption tax mark program will start testing in March and is scheduled to be officially implemented in January 2026.
According to Aspi’s report on February 25. Ruslan Klavchenko, director of the Ukrainian Internal Revenue Service, said in a meeting with representatives of the “Ukrainian Tobacco” association and international tobacco production companies that the Internal Revenue Service and law enforcement authorities are stepping up efforts to combat the circulation of illegal tobacco products.
Experts estimate that the current black market for tobacco in Ukraine is 12.6 percent, which is a huge loss of revenue for the state and an uneven playing field for legitimate businesses. Some businesses pay taxes according to the law, while others profit from smuggled and counterfeit products.
“We are working closely with law enforcement agencies to actively reduce the size of the black market. We have stepped up inspections and implemented new regulatory mechanisms, especially for the use of e-GST targets.”
The IRS has launched several actions since the beginning of 2025, including:
- 1069 inspections of the tobacco market were conducted;
- Imposing fines totaling more than 11 million hryvnias ($260,000);
- Revoking 312 business licenses, 167 of which were for failing to operate at a registered location;
- Illegal products worth 2.6 million hryvnia ($60,000) were seized.
In areas where violations have been identified, inspections will continue.
The participants also discussed the launch plan of the e-GST target, but producers expressed concerns about whether the system would be online in time. Kravchenko stressed that “testing of the target of the electronic consumption tax will be launched in March to assess the adaptability of the market, and the system is scheduled to be officially implemented in January 2026.” At present, we are working together to formulate relevant laws and regulations, especially regarding the order of packaging labels.”
