May 19 2003, 13:28 Interfax-Ukraine

Ukrainian brewers against raising excise-duty

The Ukrainian brewing enterprises have asked Verchovnaya Rada to decline the offer of the government about increase of the beer excise from 0.23 hryvnia per litre up to 0.26 hryvnia per litre, representatives of corporation Ukrpivo have informed.

The brewers argued that the existing beer excise - 0.23 hryvnia per liter - is a critical limit and further increase in tax will result in axe of production and liquidation of medium and small enterprises. The industry's representatives also noted that despite previous increase of the excise (since January, 1, 2003), growth of tariffs for electric power and water supplies and shortage of major domestic raw material (hop), they had not increased the prices for beer up to now.

Besides this the brewers have referred to the tax law, stipulating stability of taxation during a fiscal year.

The corresponding letter was signed by leading Ukrainian brewing companies, such as Sarmat, Obolon, SUN Interbrew Ukraina, the association Ukrpivo and other interested parties and sent to the Speaker of Parliament and chairmen of the budget and finance committees.

The government of Ukraine has suggested to rise the beer excise 13 percent from the current one since July 1 - up to 0.26 hryvnia per litre, with the purpose of increasing budget earnings. The government's proposal have been approved by parliament in the first reading. Since January 1, 2003 the excise was already increased 9.5 percent from its previuos value - to 0.23 from 0.21 hryvnia per litre.