site.btaInstitute for Market Economics: Budget Losses Because of Cigarette Smuggling Exceed Lv 200 Mln in 2017

Sofia, June 4 (BTA) - The revenue from taxation of tobacco products in 2017, including excise duty and VAT, amounted to 2,900 million leva, which is about 10 per cent of all tax and insurance revenue. Excise duty on cigarettes in the first four months of the year totaled 750 million leva, about 10 per cent more year-on-year, Institute for Market Economics Senior Research Fellow Peter Ganev told a forum on Monday.

The illegal trade in the country for 2007 - 2017 brought revenue between 2,600 and 3,600 million leva to the criminal world, the institute has calculated. To date, revenue from illegal cigarette trade is evaluated between 110 and 160 million leva for 2017. Respectively, the losses for the budget (because of the difference in prices of legal and illegal cigarettes) exceed 200 million leva, Ganev added. He was speaking at a news conference on the subject of law and economy of illegal trade with tobacco products in Bulgaria.

According to a nationally representative survey commissioned by the institute to Alpha Research and presented by Elena Lilova, 5.6 per cent of the smokers smoke illegal cigarettes. The survey was conducted between March 20 and April 20. A total of 11.7 per cent of all smokers said that they have smoked illegal cigarettes occasionally in the last two or three years. Annual revenue from illegal cigarettes is calculated at 125 million leva.

Most of the tobacco smoked in this country is illegal, the institute finds, with a share reaching 70 per cent and the annual revenue from this market is about 22.4 million leva.

The institute's legal expert Ivan Bregov recalled that the introduction of a EU directive in 2019 will ensure tracking of the cigarettes from production to stores, and this will be valid for all tobacco products as of 2024. The institute recommends a register of the machines for production of tobacco items in Bulgaria, as well as stamped prices on the packages.

Svetoslav Vladimirov of the National Customs Agency said that slightly over 37 million cigarettes and over 16,000 kg of tobacco were confiscated in 2017, and nearly 33 million cigarettes since the beginning of this year. The tobacco confiscated by end-May this year exceeded 34,000 kg. Control at border checkpoints has also been increased.