Illegal trade up in GCC

The illegal trade in cigarettes has cost GCC (Gulf Co-operation Council) governments $210 million in ‘lost’ revenue since excise tax was introduced in the region last year, according to a story in the Arabian Business magazine citing a report attributed to Philip Morris International (PMI).
The report, which was based on research carried out in collaboration with Oxford Economics, was aimed at monitoring consumption, sales and ‘lost’ tax revenues as a result of the illegal trade.
The story said that the share of the overall cigarette market taken by illicit products during the first half of 2018 stood at 5.3 percent, up from 1.6 percent – presumably during the first half of 2017.
Part of the reason for this rise is because cigarette consumption has dropped overall in the region.
Saudi Arabia, with 6.6 percent, has the highest level of illegal sales, while Kuwait, which has some of the cheapest cigarettes in the region, has the lowest level of illegal sales, 1.0 percent.
Cigarette consumption in Saudi Arabia fell from 34.0 billion in 2015 to 27.5 billion in 2017 but illicit consumption increased there from 484 million cigarettes in 2016 to 571 million cigarettes in 2017.