The business community, united by the American Chamber of Commerce in Ukraine, the European Business Association, the Excise Goods Manufacturers’ Committee of the Union of Ukrainian Entrepreneurs, and the "Ukrtyutyun" Association, calls on the Verkhovna Rada of Ukraine to consider the possibility of postponing the entry into force of the legislative provisions, compliance with which requires the production facilities re-equipment.
On December 16, 2021, before Russia’s full-scale invasion of Ukraine, the Parliament of Ukraine adopted Law #1978-IX which provides structural changes in the current regulation of tobacco products manufacturing, requiring the re-equipment of production facilities. The business community supported the adoption of Law #1978-IX, participated in working groups to amend the draft legislation, and started preparations to introduce new regulations.
Unfortunately, the provisions of the Law come into force during a full-scale war, involving product changes that require re-equipment of production lines, revision of the product portfolio, and significant investments. The equipment's installation, adjustment, and maintenance are exclusively carried out by the specialists of the manufacturer of such equipment, who will only be able to come to Ukraine once the war ends. The lack of possibility to re-equip factories will lead to a reorientation towards imported products. Consequently, there will be an outflow of foreign exchange earnings, a decrease in investments, a decrease in the workload of factories, interruptions in the supply of products, illegal market growth, and, as a result, a reduction of tax revenues to the budget, etc.
The business community calls on the Verkhovna Rada of Ukraine to consider as soon as possible the possibility of introducing appropriate amendments to the legislation and prevent the occurrence of the mentioned possible negative consequences for both the business community and the state’s economy.
