In an effort to halt the growing illegal tobacco trade between Belarus and countries of the EU, the EU Commission has called on the government in Minsk to raise its excise duty rates to EU levels, according to a story by Sarantis Michalopoulos for EurActiv.com.
Günther Oettinger, the EU’s Budget Commissioner, was said to have, for the first time, recognized that low excise taxation on cigarettes in Belarus encouraged the illegal trade.
The main drivers of cigarette smuggling from Belarus to the EU were the “big differences in fiscal charges on tobacco products,” he said on Wednesday.
“To reduce cigarette smuggling from Belarus, the Commission would encourage Belarus, as well as other neighbouring countries, to approximate its excise duty rates to the levels in the EU,” Oettinger said.
The EU Parliament recently called on the EU executive to tackle the illegal tobacco trade from Belarus.
Oettinger responded last week by saying that Belarusian products accounted for about 10 percent of the illegal tobacco market in the EU.
Project SUN, an annual study commissioned by the four major tobacco manufacturers was the first to estimate the scale of the illegal cigarette market in the EU. It found that extremely low excise taxes in Belarus incentivised tobacco smuggling to the EU.
The average price of a pack of 20 cigarettes in Belarus is €0.58, while in Poland the average price is €3.13, in Lithuania €2.60, and in Latvia €2.86.
Oettinger emphasised it was equally important for Minsk to strengthen its operational co-operation with the European Anti-Fraud Office (OLAF) and member states’ customs authorities.
Nowhere was it mentioned that one of the main drivers of the illegal trade in any one country is simply the difference between the cost of manufacturing and distributing a pack of cigarettes, and the price at which it is offered to consumers after the imposition of tax.