Illicit Smokes Top 10 Percent in Cyprus

Illegal cigarette consumption in Cyprus reached 11 percent of the total market in 2023, reports Philenews, citing a KPMG report commissioned by Philip Morris International.

Despite a slight decrease in the percentage of illegal cigarette consumption since the previous report, the government still missed out on €18 million ($19.49 million) in tax receipts due to illicit tobacco trade in 2023.

Cypriots smoked an estimated 100 million illegal cigarettes during 2023, most of which were believed to originate from the northern part of the island, where the Republic of Cyprus does not exercise control.

Outflows of illicit cigarettes from Cyprus rose by 3 percent compared to 2022, with increased outflows to smaller markets.

This increase was partially offset by reduced outflows to the United Kingdom, although it remains the primary destination for illegal cigarette outflows from Cyprus in 2023.

At the EU level, smokers consumed more than 35 billion illegal cigarettes in 2023, accounting for 8.3 percent of the trading bloc’s consumption.

Illegal cigarette consumption has been increasing for five consecutive years in Europe, reaching 52.2 billion cigarettes in the 38 countries included in the study.

EU governments lost an estimated €11.6 billion in tax revenue in 2023 compared to €11.3 billion in 2022.

The report notes that the increase in counterfeit cigarette consumption across Europe, primarily driven by the U.K. and Ukraine, is now combined with growth in all other categories of illegal trade.

The recovery of legal cross-border quantities following the lifting of Covid-19 travel restrictions in 2022 has pushed overall nondomestic consumption in the 38 European countries studied to its highest recorded level (15.5 percent), equating to more than one in six cigarettes.