Authorities and industry representatives in Bosnia and Herzegovina say the illegal tobacco trade is costing the country more than €500 million annually, as cigarettes without excise stamps and cross-border smuggling continue to undermine the legal market and public revenues. Officials from the Indirect Taxation Administration of Bosnia and Herzegovina and the Finance Ministry stressed that coordinated enforcement, stable excise policy, and cooperation with manufacturers such as British American Tobacco and Japan Tobacco International helped reverse a sharp market collapse seen around 2019–2020, when legal cigarette volumes fell from 12 billion to 3.5 billion sticks annually.
Authorities say improved policy alignment and citizen reporting through the “Stop Smuggling” campaign have since supported revenue recovery, while warning that the shadow market still distorts competition, drains budgets that fund public services, and complicates efforts to align with European regulatory standards.