Part of smuggle cigarettes in Latvia made 38 per cent
Since 2007 prices on cigarettes have grown 2.5 and market of illegal cigarettes has increased by 8 per cent and makes at present moment 38 per cent. This information has informed head of Latvian branch office of Japan Tobacco International, while commenting government plans to increase excise taxes on tobacco products.
He has warned that this will only cause growth of smuggle cigarettes.
He has also reminded that Latvia has undertaken a commitment to increase excise rate till 63 lat (90 euro) for 1000 cigarettes. This increase should have taken place gradually and predictably, but as result grey market started to grow faster than expected.
According to representative of Japan Tobacco International opinion, increase of excise tax on tobacco products will not ensure additional budget revenue.
"First of all, after each increase of taxes budget revenue doesn't increase, but on the contrary reduce. Secondly, increase of excise tax is planned in the segment of the cheapest cigarettes. Consumers pf these products will be first who will pass to smuggle products, in such a way stimulating illegal market", - the Head of Latvian branch office of Japan Tobacco International has marked.