The increase in excise tax rates on fuel will lead to an increase in prices at gas stations by 1-1.5 hryvnia, but the overall tax increase may lead to a 2.5 hryvnia increase in fuel prices starting in September. This, in turn, will affect the prices of goods and services, which primarily include transportation costs, UNN writes.
The increase in excise taxes on fuel will certainly lead to an increase in fuel prices; according to various forecasts, the increase will be by UAH 1-1.50 for different brands of diesel fuel and gasoline, depending on the brand. This will certainly lead to an increase in transportation costs for all businesses and companies without exception. This will be especially sensitive for those whose transportation costs account for a significant share of production costs. Secondly, it will certainly make harvesting and processing more expensive for farmers this season
At the same time, Novak believes that the increase in the excise tax rate on fuel will not have a significant impact on prices. "The food market in Ukraine is extremely competitive, and this mutual competition does not allow either producers or traders to increase prices significantly, depending only on the growth of their costs. Therefore, both producers and traders will partially address this issue of rising transportation costs by reducing their own profitability. As for bread, it is unlikely to rise in price due to rising fuel prices, by 10-20 kopecks at most," Novak said.
At the same time, Nina Yuzhanina, a member of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, noted that, in addition to the fuel excise tax increase, the parliamentary decision to raise taxes will put additional tax pressure on the market operators.
"We asked one of the operators of the fuel retail market to calculate how much the price will rise if the draft law on additional payment of 1% of turnover and income tax per cubic meter of tanks by all taxpayers under the general taxation system is adopted. This is actually exclusive information because no one has calculated it yet. But we had it calculated by an enterprise, a medium-sized network of not top-end gas stations. And they said that they would have to raise the price by UAH 2.5 in addition to the excise tax. Therefore, there is every chance that fuel will rise in price by an additional UAH 2.5 on September 1 due to the ill-considered steps taken by the government," Yuzhanina said.
Recall
The Verkhovna Rada has passed a law raising the excise tax on fuel. The document stipulatesthat the excise tax rate for gasoline will be 359 euros per 1,000 liters, for diesel 330 euros, and for gas 70 euros. The increase will take place over 4 years until 2028 and will start on September 1.
Commenting on the increase in fuel excise taxes, Danylo Hetmantsev, chairman of the Parliamentary Committee on Finance, Taxation and Customs Policy, once again resorted to the usual explanation he uses every time he insists on increasing taxation: the army needs the money. "Today, people who criticize the excise tax increase know perfectly well that there is no alternative to raise excise taxes or not to raise them. There is an alternative - either to pay salaries to the military or not to pay them," he said.
Energy expert Hennadiy Ryabtsev said in a commentary to UNN that by raising excise taxes on fuel, MPs are destroying the liquefied gas market, which is a social fuel in Ukraine.
Add
The government has submitted to the Verkhovna Rada draft laws on tax increases and amendments to the state budget for 2024. The Cabinet of Ministers proposes to the Parliament to increase the military tax rate to 5%, and for some transactions to 30%. Danylo Hetmantsev, chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, supported the government's initiative, noting that he sees no other options than to accept the Cabinet's proposal to raise certain taxes (military duty, excise taxes, in particular on fuel and tobacco), increase the relevant tax base, and place more government bonds, which may also include NBU issuance.
"Yes, this is a bad decision that will hinder economic recovery, the growth of citizens' incomes and potentially pose risks to macrofinancial stability. However, there is no other way than to close the gap in the military now, because in a few months we will face a significant shortage of funds for the current maintenance of the army, which will begin to deepen sharply by the end of the year," Hetmantsev wrote .
The head of the Rada's tax committee has repeatedly voiced the idea of raising taxes in Ukraine. According to economic expert Yuriy Havrylechko, the elimination of the tax and customs services and the transfer of the economy to martial law may be an alternative to Hetmantsev's idea of raising taxes to close the budget gap.