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A predictable fiscal framework is imperative for maintaining a low level of smuggling. Over 80 million cigarettes were seized by the authorities in the first seven months of 2023

2 August 2023

In the first seven months of 2023, Romanian authorities seized over 80 million illegal cigarettes.
Their total value on the black market is over 65 million lei.
BAT's objective is to build A Better Tomorrow™, which involves supporting efforts to combat illicit traffic activities.

Bucharest, August 2nd, 2023 – In the first seven months of 2023, Romanian authorities seized over 80 million illegal cigarettes, registering a 50% increase compared to the same period of 2022. The black-market value of contraband cigarettes seized in the first seven months amounts to over 65 million lei, according to data centralized on www.stopcontrabanda.ro, the only real-time centralizer of contraband cigarette seizures in Romania.

Last year, the annual average of the illegal cigarette trade was 7.1%, the lowest average in the last 15 years. In comparison, the maximum average level reached by the cigarettes black market in Romania was in 2010 and represented 27% of the entire consumption. A low level of illicit cigarette traffic implicitly means higher revenues for the state budget.

BAT, the leader of the Romanian tobacco market, is also one of the largest contributors to the state budget, with a total contribution of more than 10 billion lei (2.1 billion euros) in the form of taxes and excises in 2022.

„The continued decline of the black market is a positive effect of the authorities` efforts to combat smuggling, and it is also the result of a fair and predictable fiscal framework, with the decrease in illegal activities directly correlated with the contributions’ increase of the tobacco industry to the state budget. We hope that the recent initiatives announced in the public space regarding the increase of the excise duties for tobacco and nicotine products will not materialize, because a tax increase outside the 5-year calendar adopted less than a year ago will inevitably also lead to the increase of the black market. The smuggling methods are constantly diversifying, with the activity of organized crime networks being limited only by the imagination of traffickers. We believe that it is very important that the decision-makers support this decreasing trend in illicit trade by ensuring the fiscal predictability needed to combat illicit traffic that directly affects Romanian consumers, the state budget, and also tax-paying companies and their employees", said Ileana Dumitru, Legal and Public Affairs Director, South Eastern Europe Area in BAT.

According to the Nanny State Index 2023, Romania has the highest taxes for tobacco products in relation to the population's income and purchasing power. At the opposite pole, countries such as Luxembourg, Austria, or Germany register the lowest levels in terms of tobacco taxation.

Romania has 2,000 km of border with non-EU countries, where the price of tobacco can be up to three times lower, and each container of illegal cigarettes equals 1 million euros profit for smuggling networks.

Illicit trade with excisable products has a significant impact on governments' efforts to secure essential revenues to finance and support public services. Between 2016-2022, Romania lost state budget incomes of about 17.8 billion lei because of cigarette smuggling .

Data on the evolution of cigarette seizures in Romania are centralized in real time on www.stopcontrabanda.ro, a BAT initiative that aims to support the authorities by centralizing information on contraband cigarettes’ seizures across the country, and also to inform consumers about to the effects of cigarette smuggling on society. The campaign is carried out in partnership with the Romanian Police, the Romanian Border Police, the National Agency for Fiscal Administration (ANAF) and the General Directorate of Customs. "Stop Contrabanda" campaign was launched in the spring of 2017 by BAT to create a single information point on illicit cigarettes seizures and cigarette smuggling.

1. https://nannystateindex.org/

2. 2016-2022 aggregated data, according to industry estimates