Tax enforcement officials in Malaysia investigated 175 cases of counterfeit cigarette sales in the country between 2012 through September 2013. The value of the black market cigarettes seized by security agencies was worth $36,000 (117,800 Malaysian Ringgit).
A legitimate pack of cigarettes with taxes included is sold for $2.17 (7 Ringgit). A counterfeit pack is sold illegally for $0.93 (3 Ringgit).
Source: Bernama, “Smuggling of fake cigarettes on the rise,” New Straits Times, September 26, 2013.
An independent think tank in Romania released a study that claimed $24 Billion (€18 Billion) in government revenue was lost due to tax evasion activities. The amount lost is equal to 13.8 percent of the country’s GDP. In terms of percentages, the amount lost in 2012 was slightly lower than the record high of 15 percent in 2011.
Evading cigarette taxes accounted for $388 Million (€291 Million) in losses. Cigarette smuggling accounted for 13.3 percent of the overall tobacco market in Romania.
Evading alcohol taxes accounted for $257 Million (€193 Million) in losses. Alcohol smuggling accounted for 45.7 percent of the overall alcohol market in Romania.
Source: “Tax evasion in Romania stood at 13.8 percent of GDP last year,” Balkans.com, September 16, 2013.
According to a report by the Tax Foundation, 19.1 percent of all cigarettes consumed in the US State of Florida in 2011 was smuggled into the state and sold without tax payment.
$1.24 Billion in cigarette taxes was paid in Florida in 2012. Based on the percentage of smuggled cigarettes, Florida lost around $240 Million in tax revenue to cigarettes sold on the black market.
Smugglers are able to purchase cigarettes in the neighboring state of Georgia and make a $1 profit by selling the pack in Florida.
Source: “Cigarette smuggling in Florida increases,” Action News Jax, September 6, 2013.
The Managing Director for British American Tobacco Uganda claims that over 20 percent of the cigarette market in Uganda is made up of counterfeit cigarettes packs.
Packs of cigarettes in Uganda are subject to a 42 percent excise tax.
The smuggling of tobacco products in Uganda is most active on the borders shared with South Sudan.
Source: Joseph Kimbowa, “‘Counterfeits affecting BAT, tax revenues’,” Observer (Uganda), September 5, 2013.
Pakistan Tobacco Company (PTC) stated in their annual report that 18.4 percent of total cigarette sales in Pakistan in 2012 were either smuggled or were counterfeit cigarettes.
The black market tobacco trade created over $1.9 Million (2 Billion Pakistani Rupee) in losses to the legitimate tobacco industry in Pakistan.
Between 2007 and 2012, the illicit trade increased over 60 percent.
Company officials claim that the high tax rate in Pakistan on cigarettes is the cause of the smuggling. The tax on a pack of cigarettes if sold in a retail store ranges from 68.5 percent to 81 percent.
Source: Faroq Baloch, “Spreading like fire: One in four cigarettes sold is smuggled or counterfeit,” Express Tribune, September 1, 2013.
According to security estimates by the Royal Canadian Mounted Police (RCMP), there are around 50 illicit tobacco manufacturers producing contraband cigarettes on First Nations in Ontario and Quebec.
Across the border of the United States in New York State, the RCMP estimates that there are roughly 10 contraband cigarette manufacturers in the Akwesasne Mohawk territory.
The Criminal Intelligence Service Canada (CISC) reported that there were at least 58 organized crime groups that were involved in the illegal tobacco industry in Canada. 35 of the groups were operating in Central Canada.
Source: Douglas Quan, “About 50 contraband tobacco manufacturers operating in First Nations reserves, document reveals,” Canada.com, August 27, 2013.
A carton of cigarettes costs around 20 Euros in Gibraltar, a British territory located on the Southern end of Spain.
In Spain, that same carton of cigarettes is sold on the black market for double the price.
In a media report, cigarette smugglers stated that they are paid $13 (€10) per box oof 500 cigarettes. The smugglers use jet-skis to evade the police while smuggling the contraband into Spain.
Source: AFP, “Gibraltar chases sea-borne tobacco smugglers,” Google News, August 16, 2013.
Between January and July 2013, authorities in Ireland seized 840 liters of counterfeit alcohol across the country.
Officials state that most of the organized crime groups involved in the production of counterfeit alcohol also are invovled in cigarette smuggling.
Source: “‘Unscrupulous pub owners’ selling dangerous counterfeit alcohol,” Journal, August 6, 2013.
As of 2013, a carton of cigarettes can be purchased in the US State of Virginia for $15 to $20.
A carton of cigarettes is sold in retail stores in the State of New York for $120 due to state and local taxes.
Cigarette smugglers purchase cartons in Virginia and sell them for $60 to $70 on the black market in New York.
Up to 60 percent of all tobacco smoked in New York was smuggled from out of state.
Source: Kyle Hughes, “Officials: Cigarette smuggling costing state big money,” Troy Record, August 3, 2013.
As of July 2013, an estimated 800,000 cigarettes were being smuggled into the black market of Costa Rica each day, according to the tobacco industry in the country. The rate of cigarette smuggling was 19 percent higher than the previous year.
In 2008-2009, the smuggling rate for tobacco in Costa Rica was 20 percent of all tobacco consumed in the country. In 2013, the smuggling rate was up to 80 percent.
Source: Jaime Lopez, “Cigarette Smuggling in Costa Rica on the Rise,” Costa Rica Star, July 5, 2013.