eExcise in Ukraine: 4 unexpected facts about the reform that an entrepreneur should know

What is e-Excise?

The shadow market of alcohol and tobacco is a chronic problem of the Ukrainian economy. Due to illegal circulation of these products, the state budget, according to estimates (including government ones), loses about 30 billion hryvnias every year. To combat this phenomenon, the government is introducing the ambitious e-Excise reform — a new electronic system designed to make the market transparent and controlled.

The essence of the reform is simple: instead of old paper excise stamps, every bottle of alcohol or pack of cigarettes will receive a unique digital DataMatrix code. This code allows tracking the movement of goods at every stage — from the manufacturer or importer to the store shelf and the final sale to the consumer. This should prevent counterfeit products from entering the legal market.

However, like any large-scale change, the implementation of e-Excise contains many nuances that are not always obvious. We will reveal four non-obvious aspects of the reform that show where entrepreneurs will face not only new rules but also potential pitfalls.

1. The launch was postponed, and this is (surprisingly) good news

At first glance, postponing the reform deadlines may seem like a sign of stagnation. However, in the case of e-Excise, this is a rare situation where a bureaucratic delay turned out to be a rescue for the market. The mandatory launch of the system was postponed to November 1, 2026, and the testing period was extended until October 12, 2026.

The reason for the delay was insufficient technical readiness of the system, as pointed out by the business community, in particular the European Business Association (EBA). The joint decision of the government and business to postpone the launch helped avoid serious risks. Launching an unfinished system would inevitably have led to collapse: logistics would have stopped, store shelves would have emptied, and the budget would have lost billions.

Thus, this pause is constructive. It gives companies critically important time to properly test the system, adapt their own software, and train staff, especially to work in offline mode. However, this delay is not just a technical pause. It is a clear symptom of a much deeper, systemic problem in Ukrainian public administration that deserves separate discussion.

2. The real battle is over old paper stamps

While the implementation of the new system was postponed, a new conflict emerged related to old paper stamps. The Cabinet of Ministers set a shortened deadline for returning unused and damaged stamps — until May 1, 2027. This decision caused outrage in the business community.

The International Chamber of Commerce Ukraine (ICC Ukraine) insisted on a longer transition period, proposing to set the final return date at November 1, 2027 (12 months after the system launch). However, the government reduced the previously announced eight-month period to six. Such insistence by the government may indicate either a desire to accelerate the transition and start collecting revenues from the new system sooner, or an underestimation of the real logistical difficulties businesses face during wartime.

Business arguments are entirely pragmatic, as stated in the ICC Ukraine statement:

"The decision to shorten the period for returning unused and damaged paper excise stamps will lead to significant financial losses for businesses."

According to statistics, about 5% of paper stamps are damaged during production and transportation. In wartime conditions, logistics, especially for importers, are significantly complicated. Returning all damaged stamps to tax authorities within a short timeframe will be problematic. This creates additional financial risks and significant administrative burden for entrepreneurs.

3. Ukrainian e-Excise is more ambitious than European analogues

It is important to understand that the Ukrainian e-Excise system is not just a copy of European practices, but a much more complex and ambitious project. According to the Minister of Digital Transformation Mykhailo Fedorov, the system is three times more complex than its EU analogues. This is both a reason for pride in its ambitions and a serious prerequisite for future technical risks.

The main reason for this complexity is that Ukrainian e-Excise is designed to simultaneously track both tobacco products and alcohol. This is a technically much more challenging task than creating separate systems for each product group. It is worth noting that the system was developed without the use of state funds, thanks to donor financing.

At the same time, European experience shows significant potential of such reforms: public assessments and official communications regarding the EU Tobacco Track & Trace system indicate that the introduction of digital tracking of tobacco products contributed to a noticeable reduction in illegal products, in some estimates — by up to about 20%. This gives hope that the comprehensive Ukrainian solution can become an effective tool in combating the shadow market in two key industries at once.

4. Code is written, laws are not: the main bureaucratic trap of e-Excise

The postponement of the system launch discussed at the beginning is a direct result not only of technical shortcomings, but also of a deep-rooted problem of the Ukrainian state apparatus. Even a perfectly written law may not work if the government does not adopt the necessary implementing regulations — resolutions and procedures — in time.

This problem directly affected the launch of e-Excise. One of the reasons why system testing did not start on time was precisely the absence of all necessary secondary legislation that should regulate its operation. According to SIGMA experts, in 2022 the government adopted only 11% of all mandatory secondary documents required to implement already adopted laws.

This is a systemic challenge demonstrating that the success of any reform depends not only on the technical readiness of software. It requires administrative discipline, coordinated work of all branches of government, and timely preparation of a complete regulatory framework.

Practical solution: how businesses can prepare for reporting today

This bureaucratic uncertainty creates a toxic environment for business, where the rules of the game can change regardless of its efforts. In conditions where influencing the state machine is difficult, the only correct move is to perfectly organize internal processes and take control of what is possible. That is why reporting automation, in particular using tools such as Torgsoft, is no longer just a convenience but becomes an element of strategic risk management.

One such tool is the additional option "Excise Tax Declaration" in the Torgsoft accounting software. It is designed to automate the creation of mandatory monthly tax reporting, relieving entrepreneurs of routine tasks.

Key benefits of the option:

• Automatic report generation in the correct XML format required by tax authorities.

• Inclusion of mandatory Appendix No. 6 to the declaration.

• Data storage for the company and accountant, saving time during monthly submission.

• Error prevention related to manual completion of complex forms.

This function is intended for retail sellers of excisable goods: spirits, beer, wine products, and more. Preparing for the new rules in advance is advisable by using tools that make work simpler and safer already today.

Thus, e-Excise is currently a reform with two faces: on the one hand, it is a powerful digital tool with proven potential in the EU; on the other, a project that has become hostage to classic Ukrainian problems — administrative negligence and the gap between ambitious declarations and real implementation.

Will e-Excise become an effective tool for market de-shadowing, or will it turn into yet another barrier for conscientious entrepreneurs? The answer depends both on the state's ability to ensure transparent and stable rules of the game and on the readiness of businesses themselves to adapt and implement new digital tools.