Cig­a­rettes con­tra­band lev­els in Latvia re­main the high­est among EU mem­ber states

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Latvia re­mains the un­for­tu­nate leader among EU mem­ber states in terms of cig­a­rette con­tra­band – 21.1% of the to­tal amount, ac­cord­ing to data from a sur­vey per­formed by KPMG last year.

«With that, Latvia’s an­nual losses from un­paid taxes be­cause of cig­a­rette con­tra­band reach ap­prox­i­mately EUR 59 mil­lion. Although cig­a­rette con­tra­band vol­umes have de­clined 1.5% com­pared to 2016, Latvia re­mains the only coun­try in the Euro­pean Union with cig­a­rette con­tra­band ex­ceed­ing 20% of to­tal vol­ume of cig­a­rettes con­sumed in the coun­try. Il­le­gal cig­a­rette trade vol­umes in Es­to­nia and Lithua­nia were 11.3% and 17.8% re­spec­tively last year,» KPMG Latvia rep­re­sen­ta­tives say.

Cig­a­rette con­sump­tion in Latvia was 2.28 bil­lion units last year, which is 6.6% less when com­pared to 2016. The vol­ume of con­tra­band and coun­ter­feit cig­a­rettes in Latvia ac­counts for 21.1% of the en­tire con­sump­tion vol­ume in the coun­try, reach­ing 0.48 bil­lion cig­a­rettes in ac­tual num­bers. 71.3% of this vol­ume can be called ‘white con­tra­band’, 7.7% fall un­der the cat­e­gory coun­ter­feit cig­a­rettes, and 21% – other types of con­tra­band prod­ucts.

Be­larus and Rus­sia re­main the lead when it comes to car­ry­ing con­tra­band cig­a­rettes to Latvia. 343 mil­lion cig­a­rettes or 66.7% of con­tra­band was car­ried to Latvia from Be­larus in 2017. 51 mil­lion or 10% of con­tra­band cig­a­rettes were brought to Latvia from Rus­sia. Ac­cord­ing to re­sults of KPMG study, 37 mil­lion of all cig­a­rettes con­sumed in Latvia in 2017 were coun­ter­feit cig­a­rettes. Con­tra­band flow is the main rea­son for con­sid­er­able cig­a­rette price dif­fer­ences. For ex­am­ple, the av­er­age price of a cig­a­rette pack in Latvia was EUR 3.03 in Jan­uary, whereas in Be­larus the price of a sin­gle pack is only 43 cents. In Rus­sia the av­er­age price is roughly EUR 1.39.

Study rep­re­sen­ta­tives say that legally and il­le­gally Latvia has ex­ported 123 mil­lion cig­a­rettes to EU mem­ber states. Cig­a­rettes are mainly ex­ported to Es­to­nia (29 mil­lion units), Swe­den (17 mil­lion units), Fin­land (17 mil­lion units), Ger­many (16 mil­lion units), and Bri­tain (15 mil­lion units). It should be said that the av­er­age price of a cig­a­rette pack in was EUR 3.24 in Es­to­nia, EUR 6.12 in Fin­land, EUR 6.000 in Swe­den, and EUR 8.83 in Bri­tain.

A de­cline for cig­a­rette con­sump­tion has been ob­served in Europe (in­clud­ing Switzer­land and Nor­way). Com­pared to 2016, to­tal con­sump­tion there de­clined by 3% last year. There was also a 7.4% de­cline for con­sump­tion of con­tra­band cig­a­rettes. The pro­por­tion of con­tra­band cig­a­rettes on the mar­ket in Europe ex­ceeded 8.7% (44.7 bil­lion units) last year, ac­cord­ing to study rep­re­sen­ta­tives.

Ieva Čīka/LETA

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