Introduction:
Ukraine significantly increased tobacco excise taxation since 2007, which reduced the affordability of tobacco product, and resulted in decreasing prevalence among adults, on average. However, because of large price and tax gaps across tobacco products combined with companies’ brand and price manipulations (“price wars”) the reforms differentially impacted consumers depending on income and age groups. We estimate the impact of tobacco tax reforms since 2007 in Ukraine on tobacco products’ affordability and demand across relevant population groups.

Material and Methods:
Using the variations in size, time, and design of tobacco tax reforms as natural experiments and a probit methodology, we estimate the impact of the reforms on affordability, health, and revenue. We use individual data on tobacco consumption and health outcomes from 2007 to 2014 from the ULMS and GATS Surveys. Data on tax revenue, sales, prices, and tax structure by tobacco products are from official government sources.

Results:
Recent tobacco tax reforms in Ukraine have significantly increased the share of tobacco taxes in the retail price. Yet these reforms had mixed impacts on prevalence depending on income and age groups, while the impact on tax revenue was different than predictions.

Conclusions:
We show that tobacco tax policy reforms in Ukraine since 2007 had mixed impacts on prevalence and health outcomes depending on income and age groups, while the impact on tax revenue were lower than predicted. We further discuss the most recent reforms and provide recommendations for future changes in tobacco excise taxation and design.