Excise tax on sweet carbonated drinks: when parliament might consider the bill and whether it will do so at all

A bill has been registered in the Verkhovna Rada for over 2 years, which provides for the introduction of an excise tax on sweet and flavored drinks, which could increase the prices of these drinks by 5 hryvnias. UNN investigated whether the prices of sweet drinks could indeed increase, and when the bill is planned to be considered in parliament.

DetailsBack in March 2023, bill No. 9032 was registered in the Verkhovna Rada, which proposes the introduction of an excise tax on waters, including mineral and carbonated, with the addition of sugar or other sweetening or flavoring substances.

This draft law provided for the introduction of an excise tax rate until the end of martial law on drinks with added sugar in the amount of 5 hryvnias for every 25 grams of sugar or other sweetening substance equivalent to 25 grams of sugar in 1 liter.

Subsequently, an alternative bill 9032-1 was registered, which provides for the introduction of an excise tax rate of 0.1 euro (approximately 4-5 hryvnias) per 1 liter of drink. Manufacturers and importers are to pay the tax.

In July 2024, the Committee on Finance, Tax and Customs Policy recommended adopting the alternative bill as a basis, with instructions to finalize the bill before submitting it to parliament for the second reading.

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The Budget Committee, in its conclusion, indicates that no financial and economic justification has been provided for the bill, however, according to the Ministry of Finance’s calculations, budget revenues will amount to 6.9 billion hryvnias per year.

Indeed, it has been more than two years and has not even been considered in the first reading. Therefore, I don’t know what is currently happening around this draft law, although you remember, when the conclusions were submitted, it seems to me that the Ministry of Finance wrote that the introduction of such a tax would bring about 7.5 billion hryvnias per year (it will give – ed.). But for now, I have not heard of any activity in the committee or in the committee’s secretariat. No one has prepared it for consideration for the first reading.

She emphasized that given that large associations have written objections to the implementation of this tax, it is probably not being considered.

And so that we all understand, although they say that such a tax exists in more than 50% of the world’s countries, … we (have – ed.) difficulties in administration. Even the fact that we have been taxing such harmful goods as tobacco products and alcohol for years does not give much result. That is, there is a lot of shadow sector production, and, for example, it is not very successful to fight for the health of the nation by solving these issues through raising taxes. Therefore, I cannot even understand how this will affect… 0.1 euro from the sugar content per 1 liter of drink.

Answering the question of how much prices for carbonated drinks would increase if the law were adopted, the MP emphasized: “I think that for consumers who consume these products, it might not even be noticeable. Therefore, I don’t know the true purpose of this project, of this tax.”

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