Il­le­gal trade costs state dearly

Hun­dreds of mil­lions of eu­ros lost ev­ery year as black mar­ket in con­tra­band to­bacco and al­co­hol grows

Kathimerini English - - Focus - BY PROKOPIS HATZINIKOLAOU & DIMITRA MANIFAVA

State cof­fers miss out on around 700-750 mil­lion eu­ros per year in taxes due to trade in con­tra­band to­bacco and al­co­hol, sur­veys show, with tak­ings drop­ping by the year be­cause of the ex­pan­sion of the phe­nom­e­non since the out­break of the cri­sis in 2010.

Fig­ures pre­sented at the “2nd An- ti-Cor­rup­tion Fo­rum: To­ward a Sus­tain­able Econ­omy in the To­bacco Sec­tor” showed that the state im­posed taxes, levies and fines of 742.57 mil­lion eu­ros on to­bacco prod­ucts in 2017, but only a frac­tion of that flowed into state cof­fers.

In the pe­riod from 2010 to 2017, the Fi­nan­cial Crimes Squad con­fis­cated 1.27 bil­lion smug­gled cig­a­rettes and 27.81 tons of con­tra­band to­bacco.

Speak­ers at the fo­rum noted that one in ev­ery five cig­a­rettes in the Greek mar­ket is il­le­gal, and that 50 per­cent of small en­ter­prises in the to­bacco sec­tor have shut down.

Hel­lenic Fed­er­a­tion of En­ter­prises (SEV) di­rec­tor-gen­eral Akis Sk­ert­sos said that “the growth of the il­le­gal to­bacco prod­uct mar­ket, as a re­sult of over­tax­a­tion in the sec­tor and the state’s in­abil­ity to strengthen the in­spec­tion mech­a­nisms, is jeop­ar­diz­ing 60,000 jobs across the en­tire do­mes­tic to­bacco sup­ply chain.” While Greece has the high­est tax on to­bacco prod­ucts in the Euro­pean Union, “state rev­enues con­tinue to de­cline or, at best, do not grow,” he noted.

Mean­while the state’s lost rev­enues from the il­le­gal trade in al­co­holic drinks is es­ti­mated at be­tween 90 and 147 mil­lion eu­ros, ac­cord­ing to a study by the Foun­da­tion for Eco­nomic and In­dus­trial Re­search (IOBE) pre­sented yes­ter­day.

If one adds the con­se­quences of il­le­gal al­co­hol trad­ing on the en­tire 821.85 1.2333 sup­ply chain, and not just pro­duc­tion, then the lost rev­enues reach up to 430 mil­lion eu­ros per year for the state.

Be­hind this phe­nom­e­non and the 49 per­cent de­cline in the con­sump­tion of le­gal al­co­holic beverages lies over­tax­a­tion: In the last 20 years the in­dus­try has ob­served eight tax hikes, with four within the space of 18 months, from 2009 to 2010, send­ing the spe­cial con­sump­tion tax soar­ing 125 per­cent.

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