Illicit cigarettes accounted for 31.9% of total consumption across Latin America and Canada in 2025 — equivalent to 77 billion sticks — resulting in an estimated $8.5 billion in lost tax revenues, according to a report released by Philip Morris Products S.A. The study, conducted by KPMG LLP, examined the Region of the Americas (excluding the United States) and found that the region now has the highest global incidence of illicit tobacco, driven by steep tax increases and regulatory pressures that have pushed consumers toward cheaper illegal products.
The findings highlight growing fiscal, public health, and enforcement challenges, with markets such as Brazil, Panama, and Ecuador particularly affected, underscoring calls for more balanced regulation and stronger anti-illicit trade measures. Brazil has the region’s largest illicit market with 41.8 billion illicit cigarettes, while illicit cigarettes make up 89% of Panama’s market and 84% of Ecuador’s.
