The Ukrainian parliament adopted a bill on amendments to the state budget 2008 and will raise excise tax rates for tobacco products on 1 September 2008.

Rates are to be increased from EUR 0.70 to EUR 1.80 per 1,000 ovals, and from EUR 1.90 to EUR 4.15 per 1,000 filters. The ad valorem component is to be increased from 12.5 to 16 per cent of the minimum retail price of all cigarette types. According to industry experts, the laws are conflicting as the existing law bans any amendments to the budget in the middle of the year.  The new tax rates are likely to entail a hike in cigarette prices and thus increase the flow of smuggled tobacco products from Moldova and Russia, according to Akcyz.com.ua web portal. (vt)