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565 Million Lost in Taxes from Contraband Cigarettes

contraband cigarettesA study conducted by KPMG in all countries of the European Union on behalf of British American Tobacco, Imperial Tobacco, Japan Tobacco International and Philip Morris International showed that illicit trade of cigarettes has increased in Greece

More specifically, the illicit trade of cigarettes reached 17.8 % in 2013. Seven out of ten contraband cigarettes are illicit whites (illegal branded cigarettes manufactured for the sole purpose of being smuggled). The study showed that lost taxes from contraband cigarettes amounted to 565 million euros in 2013.

In Europe, one out of ten cigarettes consumed were illegal, 33% of which were the so-called illicit whites. A total of 58.6 billion illegal cigarettes were consumed in the EU, which is equivalent to the total legal cigarette markets of Spain and Portugal combined. It is estimated that EU governments lost about 10.9 billion euros in taxes.

According to the study, even though the number of “illicit whites” increased by 15% compared to 2012, the illegal trade of cigarettes in the EU stabilized, slightly falling from a record high of 11.1% in 2012 to 10.5% in 2013. This stabilization is a result of the intense efforts made ​​by the tobacco industry and the governments to tackle this illegal activity.

The illicit trade of tobacco products is a significant source of revenue loss both for governments and the legitimate manufacturers of cigarettes. British American Tobacco (BAT), Imperial Tobacco Group (Imperial), Japan Tobacco International (JTI) and Philip Morris International Inc. (PMI) are devoting significant resources to combat this problem claiming that effective solutions require solid cooperation between governments, law enforcement agencies, manufacturers and retailers.

Four Greek tobacco companies are carrying out a broad campaign to inform consumers about the illegal trade of cigarettes which is a new and growing trend in the country. The campaign is supported by the Development and Competitiveness, Public Order and Citizen Protection, Marine and Aegean ministries, the Financial and Economic Crime Unit (SDOE), the municipalities of Athens and Thessaloniki and the Panhellenic Association of  Tobacco Industries.

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