Although the trend is upward, this is still less than half the historic rate registered in January 2010: 36.2 percent of total sales, which occurred following the imposition of a STATE? tax increase.
The smuggling rate lowered, producing an average rate of 15 percent for 2010.
Cigarette smuggling in Romania is problematic because revenues from tobacco taxes account for one of the largest portions of Romania’s state budget: €2.5 billion. A single percentage point drop in smuggling amounts to €30 million in taxes for the state budget, according to Adrian Popa, a manager in Romania’s branch of British American Tobacco.
“A predictable fiscal policy determines growth in legal sales, which triggers higher taxes paid to the state,” he said.
The increase in smuggling could be the result of the season, the end of the year, or concerns that the economic crisis will worsen, according to Gilda Lazar, head of corporate affairs and communications at JTI Romania.
“We should also mention how inventive smugglers are. They now smuggle cigarettes via the hang-glider or under water, while budgets for fighting smuggling and the number of customs officers have dropped,” Lazar says.
Another hurdle for Romania is that it borders Hungary and Bulgaria, which both struggle with cigarette smuggling and where there are no customs checkpoints.
