Ukraine’s State Tax Service has intensified enforcement in the tobacco retail sector, imposing penalties of UAH 220.5 million ($5.1 million) after uncovering violations, Tobacco Journal reports. Deputy Head Andriy Trotsko said authorities are focusing on both sales compliance and licensing accuracy. Over the past year, more than 1,600 retail tobacco licenses were revoked due to breaches of legal requirements.

The service also strengthened cooperation with the National Police, issuing 1,100+ notifications of illegal trade, seizing goods worth UAH 24 million ($0.6 million), and dismantling 90 illegal trading points. According to the tax service, enforcement is boosting the formal market: tobacco retail revenue rose 25.6% to UAH 30.4 billion ($700 million) in 2025, while excise tax receipts from tobacco reached UAH 122.5 billion ($2.82 billion), up 26.9% from 2024.

However, the illicit tobacco market also grew, reaching 17.8% of total sales, driven mainly by counterfeit products. The resulting revenue shortfall was estimated at UAH 26.5 billion ($610 million), an increase of UAH 4.6 billion ($106 million) from 2024.