As a result, the losses of the state budget from the functioning of the shadow market for tobacco products will continue to be high - if in 2022 they were estimated at UAH 19.1 billion, then in 2023 they may reach UAH 22 billion. This is stated in the study "The illegal tobacco market in the conditions of a full-scale war: challenges and threats", which was presented the day before by the Ukrainian Institute for the Future.

The reasons for the growth of the illegal market are the discrepancy between the level of taxation and incomes of the population, the variability and unpredictability of regulatory policy, the discrepancy between punishment and the scale of illegal activity, in particular, the lack of coordination among law enforcement agencies in the fight against smuggling and counterfeiting. And the responsibility for the illegal manufacture and sale of cigarettes is disproportionate to the financial benefits for organized criminal groups, which leads to low effectiveness in the fight against manufacturers and "large" suppliers of illegal products.

According to the study, after Russia's invasion, the share of tobacco products illegally produced in Ukraine increased sharply: counterfeit (counterfeit) and cigarettes without excise stamps with Duty Free labeling or for export, which are illegally sold on the domestic market without paying taxes. In 2022, the market share of such products increased to 11.7% of the total market.

Among the experts' recommendations is the approval of a new Strategy for Combating Illicit Trafficking of Excisable Goods, which should provide for the introduction of a balanced approach to the issue of increasing excise taxes, taking into account the dynamics of incomes and purchasing power of the population.

In addition, the authors believe that it is necessary to create an effective single center that will be responsible for coordinating the work of various law enforcement agencies involved in combating the illegal production and circulation of excisable products, to strengthen the responsibility of violators in the field of illegal circulation of excisable goods and to streamline the areas of responsibility of various law enforcement agencies involved in the investigation of such cases.

Despite the adoption of the law banning the production of duty-free cigarettes in Ukraine during martial law, a decision should be made that will solve this problem even after its completion.

According to the authors, it is necessary to strengthen control over the import and circulation of tobacco raw materials, as well as equipment for the manufacture of cigarettes, as well as to simplify and systematize the procedure for blocking the channels for the distribution of illegal products via the Internet and strengthen control over the storage and destruction of confiscated tobacco raw materials, tobacco products and equipment.