TOBACCO PRODUCTS MARKET: FISCAL AND REGULATORY ROLE OF TAXATION
Pasichnyi M. Tobacco products market: fiscal and regulatory role of taxation. International scientific-practical journal "Commodities and markets". 2021. N 3. P. 26-41.
UDC 339.13:336.226.331 | ||
JEL Classification: G28, H21, H26 | DOI: https://doi.org/10.31617/tr.knute.2021(39)02 | |
Mykola PASICHNYI E-mail: Ця електронна адреса захищена від спам-ботів. вам потрібно увімкнути JavaScript, щоб побачити її. ORCID: 0000-0001-7663-776X |
Doctor of Sciences (Economics), Associate Professor, Professor at the Department of Finance Kyiv National University of Trade and Economics 19, Kyoto str., Kyiv, 02156, Ukraine |
TOBACCO PRODUCTS MARKET: FISCAL AND REGULATORY ROLE OF TAXATION
Background. The tobacco taxation policy’s fiscal efficiency should be comprehensively examined, taking into account both the criteria for the amount of the collected tax revenues to the budget system and the specific share of the hidden tax base, which is part of the shadow economy.
The analysis of recent research and publications has shown that despite the availability of some scientific investigations, it is advisable to further develop the main provisions on the tobacco excise tax collection for Ukraine, taking the current market trends and the potential threats into account.
The aim of this article is to assess the potential development challenges for the domestic tobacco market and to develop both scientific and practical proposals to increase the fiscal and regulatory effectiveness of the excise tax on tobacco and tobacco products.
Materials and methods. In the course of research, the system approach, the methods of analytical estimation, synthesis, economic and mathematical modeling, and scientific abstraction were used.
Results. The directions for the further improvement in the tobacco excise taxation practice were offered, taking into account its fiscal and regulatory aspects. The modern peculiarities of the development of the tobacco products market in Ukraine were determined. The main causes and consequences of the illicit excisable goods’ production and circulation have been studied. The excise tax potential index’s calculations without the implementation of systematic measures in the field of counteracting the illicit market were presented. The government policy’s vectors in the field of reducing the cigarette market’s shadow segment have been identified.
Conclusion. Taking the excisable goods shadow market’s indicators and its expansion potential into account, the balanced adjustments of the state fiscal policy is important. Counteracting the illicit tobacco and tobacco products trafficking is an important element of the national and economic security strategy. It is advisable to systematize the reliable information on the prevalence of smoking, consumer preferences and the relevant products’ consumption intensity in the territorial context, and the illicit market share as well. On the part of the authorized state institutions, the priority measures are modeling the supply and demand for tobacco products; systematization of information on its illegal circulation; description of the modus operandi of the main participants in the shadow market of tobacco and tobacco products; assessment of institutional capacity, transparency and accountability of fiscal and other authorized bodies for counteracting illicit products trafficking.
Keywords: fiscal policy, budget revenues, excise tax on tobacco and tobacco products, shadow economy, tobacco products market, public health.
REFERENCES
- Ajmal, A., & Veng, I. U. (2015). Tobacco tax and the illicit trade in tobacco products in New Zealand. Australian and New Zealand journal of public health, 39 (2), 116-120 [in English].
- Chaloupka, F. J., & Tauras, J. A. (2020). Taxation of emerging tobacco products. Journal of Medicine, 373, 594-597 [in English].
- Calderoni, F., Brenner, A., Karayotova, M., Rotondi, M., & Zorč, M. (2016). The Eastern Balkan Hub for Illicit Tobacco. Milano: Transcrime – Research Centre on Transnational Crime, Università Cattolica del Sacro Cuore [in English].
- Laffer, A. B. (2014). Tobacco Taxation: Theory and Practice. San Francisco: The Laffer Center at the Pacific Research Institute [in English].
- Mikulić, D., & Buturac, G. (2020). In What Measure Is Public Finance Sustainability Threatened by Illicit Tobacco Trade: The Case of Western Balkan Countries. Sustainability, 12 (1), 401 [in English].
- Krasovsky, K. (2020). Impact of tobacco taxation policy in Ukraine in 2018–2019 on tobacco sales and revenue. Tobacco Prevention & Cessation, 6 [in English].
- Koshhuk, T. V. (2019). Shljahy vdoskonalennja porjadku splaty akcyznogo podatku z tjutjunovyh vyrobiv v Ukrai’ni [Ways to improve the procedure for paying excise tax on tobacco products in Ukraine]. Finansy Ukrai’ny – Finance of Ukraine, 4, 68-78 [in Ukrainian].
- Novyc’ka, N. V., Hljebnikova, I. I., & Korotun, V. I. et al. (2020). Modernizacija systemy kontrolju za obigom tjutjunovyh vyrobiv [Modernization of the tobacco products control system]. N. V. Novitskaya (Ed.). Irpin’; Hmel’nyc’kyj [in Ukrainian].
- Korotun, V. I., Koshhuk, T. V., Novyc’ka, N. V., & Hljebnikova, I. I. (2020). Podatkove reguljuvannja rynku tjutjunovyh vyrobiv v umovah jogo transformacii’ [Tax regulation of the tobacco products market in the conditions of its transformation]. T. V. Koschuk (Ed). Irpin’, Hmel’nyc’kyj [in Ukrainian].
- Sokolovs’ka, A. M., & Rajnova, L. B. (2017). Garmonizacija akcyznogo opodatkuvannja tjutjunovyh vyrobiv [Harmonization of excise taxation of tobacco products]. Ekonomika i prognozuvannja –Economics and forecasting, 2, 93-115 [in Ukrainian].
- Vysnovky Rahunkovoi’ palaty Ukrai’ny pro rezul’taty analizu richnogo zvitu pro vykonannja Zakonu Ukrai’ny "Pro Derzhavnyj bjudzhet Ukrai’ny na 2017 rik" [Conclusions of the Accounting Chamber of Ukraine on the results of the analysis of the annual report on the implementation of the Law of Ukraine "On the State Budget of Ukraine for 2017"]. Retrieved from https://rp.gov.ua/upload-files/Activity/Collegium/ 2018/10-4_2018/Vysn_RP_10-4_2018.pdf [in Ukrainian].
- Vysnovky Rahunkovoi’ palaty Ukrai’ny pro rezul’taty analizu richnogo zvitu pro vykonannja Zakonu Ukrai’ny "Pro Derzhavnyj bjudzhet Ukrai’ny na 2018 rik" [Conclusions of the Accounting Chamber of Ukraine on the results of the analysis of the annual report on the implementation of the Law of Ukraine "On the State Budget of Ukraine for 2018"]. Retrieved from https://rp.gov.ua/upload-files/Activity/Collegium/ 2019/8-5_2019/Vysn_vyk_dbu_2018_8-5_2019.pdf [inUkrainian].
- Vysnovky Rahunkovoi’ palaty Ukrai’ny pro rezul’taty analizu richnogo zvitu pro vykonannja Zakonu Ukrai’ny "Pro Derzhavnyj bjudzhet Ukrai’ny na 2019 rik" [Conclusions of the Accounting Chamber of Ukraine on the results of the analysis of the annual report on the implementation of the Law of Ukraine "On the State Budget of Ukraine for 2019"]. Retrieved from https://rp.gov.ua/upload-files/Activity/Collegium/2020/9-1_2020/Vysn_9-1_2020.pdf [in Ukrainian].
- Vysnovky Rahunkovoi’ palaty Ukrai’ny pro rezul’taty analizu richnogo zvitu pro vykonannja Zakonu Ukrai’ny "Pro Derzhavnyj bjudzhet Ukrai’ny na 2020 rik" [Conclusions of the Accounting Chamber of Ukraine on the results of the analysis of the annual report on the implementation of the Law of Ukraine "On the State Budget of Ukraine for 2020]. Retrieved from https://rp.gov.ua/upload-files/Activity/Collegium/ 2021/7-1_2021/Vysn_7-1_2021.pdf [in Ukrainian].
- Monitoryng nelegal’noi’ torgivli tjutjunovymy vyrobamy v 2021 roci [Monitoringof illegaltradeintobaccoproductsin2021]. Retrieved from https://tns-ua.com/wp-content/uploads/2021/05/Kantar_AIT_Infografika_kviten-2021.png [in Ukrainian].
- Stenograma komitetu z pytan’ finansiv, podatkovoi’ ta mytnoi’ polityky VRU vid 02 chervnja 2021 roku [TranscriptoftheCommitteeonFinance, TaxandCustomsPolicyoftheVerkhovnaRadadatedJune2, 2021]. Retrieved from http://komfinbank.rada.gov.ua/documents/zasid9skl/74555.html [in Ukrainian].
- Karaev, A. K., & Mel’nichuk, M. V. (2017). Osnovy jeffektivnoj akciznoj politiki na tabachnuju produkciju [Fundamentals of an Effective Tobacco Excise Policy]. Problemy jekonomiki i juridicheskoj praktiki – Problems of Economics and Legal Practice, 2, 43-47 [in Russian].
- Project Sun. A Study of the Illicit Cigarette Market in the European Union, Norway and Switzerland 2015 Results. (2016). KPMG. Retrieved from https://assets.kpmg/content/dam/kpmg/pdf/2016/06/project-sun-report.pdf [in English].
- Oficijnyj sajt Derzhavnoi’ sluzhby statystyky Ukrai’ny [Official site of the State Statistics Service of Ukraine]. Retrieved from http://ukrstat.gov.ua/druk/publicat/Arhiv_u/17/Arch_snsz_zb.htm [in Ukrainian].
- Doronina, O. A., Mazur, G. F., Klymchuk, O. V., & Jakymova, N. S. (2021). Znachennja social’no-demografichnogo prognozuvannja v realizacii’ strategii’ ekonomichnogo rozvytku [The importance of socio-demographic forecasting in the implementation of economic development strategy]. Ekonomika ta derzhava –Economy and state, 3, 14-17 [in Ukrainian].
- Ukrai’na u cyfrah [Ukraine in numbers]. (2019). Retrieved from https://ukrstat.org/uk/ druk/publicat/kat_u/2020/zb/11/zb_yearbook_2019.pdf [in Ukrainian].
- Oficijnyj sajt Derzhavnoi’ sluzhby statystyky Ukrai’ny [Official site of the State Statistics Service of Ukraine]. Retrieved from http://www.ukrstat.gov.ua/operativ/operativ2020/ pr/ovp/ovp_u/arh_ovp_20_u.html [in Ukrainian].
- Stiglitz, J. E. (2007). Making globalization work. WW Norton & Company. [in English].
- Bjudzhetna deklaracija na 2022–2024 roky [Budget declaration for 2022-2024]. Retrieved from https://mof.gov.ua/storage/files/Bjudzhetna%20deklaracija%20na%202022-2024%20roky.pdf [in Ukrainian].
- Oficijnyj sajt Derzhavnoi’ fiskal’noi’ sluzhby Ukrai’ny [Official site of the State Fiscal Service of Ukraine]. Retrieved from http://sfs.gov.ua [in Ukrainian].
- Golova DFS V. Mel’nyk proviv robochu zustrich z predstavnykamy Ukrai’ns’koi’ asociacii’ vyrobnykiv tjutjunovyh vyrobiv [SFS Chairman V. Melnyk held a working meeting with representatives of the Ukrainian Association of Tobacco Producers "Ukrtiutiun"]. (2021). Derzhavna fiskal’na sluzhba Ukrai’ny – State Fiscal Service of Ukraine. Retrieved from http://sfs.gov.ua/media-tsentr/novini/394131.html [inUkrainian].
- Oficijnyj sajt Derzhavnoi’ prykordonnoi’ sluzhby Ukrai’ny [Official site of the State Border Guard Service of Ukraine]. Retrieved from https://dpsu.gov.ua/ua/news/dpsu-prodovzhu-obdnuvati-zusillya-dlya-protidii-nezakonnomu-vigotovlennyu-ta-peremishchennyu-tyutyunovih-virobiv [in Ukrainian].