“It’s discouraging both for the industry and for authorities fighting contraband.(…) Efforts to fight contraband are hindered by oscillating tax policies and unpredictable regulatory frameworks,” said Gilda Lazar, corporate affairs and communications manager of JTI Romania, Moldova and Bulgaria.
Illicit cigarette trade rose significantly in July in the western region (+10.2 percentage points, to 27.1%) and the south-east (+4 points, to 10.2%). The north-east of Romania continues to be most affected by the black market, which stood at 35.3% in July, according to data released by Novel Research Wednesday.
“Cheap whites”, cigarettes that have no legitimate market, continue to account for the largest part of the black market and rose 5 points compared to May, to 60.8%.
Smuggling from Ukraine and Moldova decreased to 10% and 19.5%, respectively, from 14.1% and 23% in May, but smuggling from Serbia increased to 3.9% from 2.2% in May, the data showed.
The tobacco industry is the second largest tax payer in Romania after the oil industry. In 2014, the tobacco industry contributed around EUR2.7 billion to the state budget, or 1.75% of GDP and 12.5% of total budget revenues.