For 10 Years, the Illegal Cigarette Trade has "Poured" over BGN 3 Billion into the Criminal World

Crime | February 1, 2018, Thursday // 14:42|  views

Source: Pixabay

For 10 years - from 2007 to 2016, illegal cigarette trade in Bulgaria has accumulated revenues for the criminal world between 2.5 and 3.5 billion leva, a report by the Institute for Market Economics (IME) writes. The document is part of a project under the motto "By the Rules", with the main objective to explore the opportunities for improving policies and overcoming the institutional weaknesses that give ground to illegal trade of tobacco products in the country.


 
It is confirmed that short-term excise policy can undermine the achievement of the two main policy goals - health (smoking reduction) and tax (stable tobacco revenues). Excessive and sharp rise in excise duty has always led to a rise in the illegal market, economists said.
 
In 2010, the tobacco market in the country was literally flooded by illegal cigarettes, which reached a third of the market and generated huge revenues for organized crime, the report said. According to IME, in 2007, illicit cigarette sales accounted for 11.2% of the total share. Gradually, they increase and in 2010 they reach 30.7% of the trade, and the criminal revenues from this excise goods are between BGN 450 and 640 million for the year.


 
Despite the contraction of illicit trade over the years, criminal revenue is not negligible - it is between 120 million and 170 million in 2016 for the sale of about one billion cigarettes. It is a resource that largely infuses into organized crime and creates opportunities for corrupting the high and low levels of power, the report said.

The data show that a significant part of the illegal trade is in fact a source within the country. This means that the fight against illegal trade should not be directed solely to border protection, but also to more effective control over cigarette production in the country.

The big illegal market for smoking tobacco or the so-called " manually rolled tobacco" should not be omitted. Illegal trade in smoking tobacco reaches over 75% of the total market, equivalent to about 646 tonnes of bulk tobacco. This quantity is equivalent to 861 million  classic cigarettes (0.75 grams per cigarette). About 86% of the illegal bulk tobacco on the market is of local origin, ie. produced in Bulgaria, according to the report.

The review of the developments and effects of excise policy in Bulgaria also provides some lessons for pan-European policies. Harmonization should take into account differences in socio-economic factors, especially solvency margins.
 
The enormous growth in illegal trade in Bulgaria and other Eastern European countries in the early years of membership could have been avoided by more careful targeting and a far-sighted catching-up policy, experts said.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!


Tags: cigarettes, tobacco, illegal, criminal world

Back  

» Related Articles:

Search

Search