Skip to comments.Illicit EU cigarette consumption at record high
Posted on 06/21/2012 2:13:03 AM PDT by Olog-hai
The demand for cheap cigarettes in Europe is fueling the manufacture and consumption of illicit tobacco at unprecedented levels.
A report, released on Wednesday (20 June) by Philip Morris International (PMI), says Europeans smoked more than 65 billion illicit cigarettes in 2011.
Of those, more than 12 billion were consumed in Spain, Italy, Greece, Portugal, Cyprus and Malta. Western and central EU countries consumed a combined total of 36.5 billion.
But in Spain alone, cigarette contraband jumped by 300 percent in 2011 compared to 2010. In Greece, illicit consumption increased five-fold compared to 2008.
Despite efforts by law enforcement authorities to curb the illegal cigarette market, it remains a significant problem, having grown by more than five billion cigarettes in the EU in the last five years, said PMIs Artyom Chernis, vice-president of illicit trade strategies and prevention.
The production of cigarettes that are manufactured and then smuggled into another EU country went from nearly zero in 2006 to 15.7 billion last year, or nearly one in every four smoked.
The smuggled cigarettes are considered a recent phenomenon on the European black market. Many are sold throughout EU capitals at a 50 to 70 percent mark down compared to the store-bought equivalent.
The study, conducted by the US-based auditing firm KPMG, says the contraband represents an 11.3 billion annual loss in EU-wide tax revenue.
(Excerpt) Read more at euobserver.com ...
I’ve bought cigarettes at gas stations here in NJ that have no stamp at all, and one pack each that had Cyrillic and Chinese characters on them. American ingenuity will find a way...
About ten years ago...the German gov’t was run by the SPD (the liberal left), and they got a Green Party individual into the health department. There was this devised tax increase on cigarettes....a two-phase approach. The Green Party person wanted to take down consumption....which everyone simply winked at and went on to approve this....thinking it didn’t mean anything.
So roughly fifteen months go by and the tax revenue office of Germany announces that there is a minimum of 500 million bucks short-fall over what they expected to be there....all relating to cigarette smoking and a decrease in legal purchases. The significant tax that the Green Party pursued.....was showing fewer purchases, thus making them happy, but the revenue guys and the liberal party guys were furious.
So the second phase was about to start, and the revenue guys desperately wanted to halt it entirely. It was believed that it’d just push more people out to buy illegal smokes. Eventually, it was cut....but the original increase stayed in place.
Every year, they’ve lost several hundred million from regular normal purchases. So there is a breaking point where people just go the illegal way and buy it from Joe down the street, who buys it from some Russian mafia guy.
What’s the point of the article? Are they seriously making the point that taxation alters human behavior, and if revenue “enhancements” get too extreme, people will simply avoid paying? Naw. That couldn’t be.
How very unpatriotic to not pay your required taxes on cigarettes!!
Tax and spend politicians incentivize tax evasion. Only people who pay the tax are penalized, while the general population doesn't care. This is similar to taxes affecting small groups. It's not that people like taxes. It's that the numbers affected are sometimes only a small portion of the voting public.
The same thing happens, I think, when a tax applies to most people, but it's easy to evade paying it (example: use taxes). If government actually enforced taxes on a much larger scale, people would probably take more interest in what was being passed.
Bottom line: There's no such thing as a free ride, even for governments.
Dr. Pritchett: “How very unpatriotic to not pay your required taxes on cigarettes!!”
Actually, I don’t smoke. If I did, I’m one of those schmucks who believes in obeying the law for moral/religious reasons. I see why many people don’t pay when they can get away with it, but I have to answer to a higher power than Uncle Sam.
Crazy high taxes on tobacco by nannycrats is a moral outrage.
It should be resisted by any and all means available.
You should never surrender the moral high-ground to those pompous clowns.
The Euro people are giving the well deserved middle finger to their useless governments.
Same here. There wasn't a black market until the government created one.
CitizenUSA, I understand and respect your point of view on this, but as cgbg implies, there are probably limits.
Like you, I do not smoke. But the concept is not hard for me to grasp with a good simile. A good example for me is gas prices.
Let’s say the Federal or State government decides that use of internal combustion engines is a bad thing because they think it causes global warming, and concludes that the best way to discourage the use of them (and to raise money for a bloated government at the same time) is to effectively double the cost of gasoline to eight dollars a gallon by taxing it.
Now, this is pretty much what they have a history of doing with cigarettes, and it is the stated opinion by Barack Obama and many of his like minded turds, that they would like to do the same thing with gasoline and coal, so it isn’t a stretch.
I do consider myself to be an honest person when it comes to things like this, but I can say that I would freely and guiltlessly buy gasoline from a source selling it at low prices rather than engage in the self-sacrificing behavior because the government wants to change my behavior or to simply gouge me to get dollars they can shove into the Federal maw.
I would have no problem with that, and I suspect that is what cgbg is driving at.
That is absolutely true, though I do think they are testing the limits. As the Laffer Curve illustrates, you can reach a point of effective taxation where either outright defiance (not what the government wants) or changed behavior (absolutely what the government wants) will result in a net decrease of taxes collected.
I admit to having a knee-jerk reaction to having my behavior deliberately shaped and manipulated by a government whom I did not consent to granting them that power.
It makes me very angry on a basic level.
Citizen, I understand that you wish to render unto Caesar what is Caesar’s, but in this case, Caesar is asking for that which is not his. I dont think most smokers minded paying when the taxes on cigarettes were merely taxes and not the combined behavior modification program/thievery they are today.
Here in NY, for example, a carton of cigarettes now costs nearly $100 (and thats not including NYC, where a carton is now well OVER $100). At least $60 of that is for taxes, and another chunk is covering the Tobacco Settlement from c.20 years ago (in other words...another tax).
Add to that the increasingly unreasonable restrictions on the activity itself, which their proponents readily admit are designed to alter perceptions of and behavior by smokers, and youve got quite the little experiment going on.
The designers of this experiment have already begun to use these techniques on other segments of the population, and its working. We are being tenderized for tyranny.
For the past 2 decades, children have not been taught that smoking is bad for them. Instead, they are taught that SMOKERS are bad and have been instructed to pass moral judgments on them. Theyve been taught that excessive taxation, on the other hand, is morally acceptable.
Last week, a video showing some hideously raised children tormenting a school bus monitor went viral. In it, the kids were heard to be using verbiage straight out of the Obesity Epidemic curriculum currently being used in school. Just like smokers, these little brats have been taught that being fat is morally reprehensible and that anyone who IS fat must be ridiculed for it.
Where do we think Little Mikey Bloomingidiot got the nerve to become the Napoleonic toad that he is? Ill tell you where: He saw that a segment of the populace (smokers) can be made to pay confiscatory taxes AND be made into social pariahs on par with child molesters and serial killers without suffering any political repercussions himself. Now that he sees the experiment has worked, he is turning his attention to others (the obese).
So to me, avoiding these taxes is a moral imperative which I hope one day will lead to a shrinking of government intrusion into Americans daily lives. After all, our nation was founded in part by those who reasonably objected to unreasonable taxation, and I see no cause to change that attitude today.
We’ll have to disagree on the avoidance of cigarette taxes. I don’t see paying taxes as a religious freedom issue, like the contraception mandate. In other words, a cigarette tax doesn’t force me to violate my relationship with God.
On the other hand, I fully understand why a lot of people avoid oppressive taxes, and I especially appreciate that our ancestors fought a rebellion to free us from oppressive government. I don’t like taxes, but I think a reasonable level of them are necessary to pay legitimate government functions. We’re way beyond that nowadays of course.
That said. Taxes usually fall under Caesar’s realm, although I can imagine ways where they could be used to discourage freedom of religion. I’m prepared to follow the law until that happens. If something like that does come along, I will disobey, prepare to pay the consequences, and fight it in the courts.
There is another aspect to the increase in illicit cigarette sales that the article doesn’t really bring up: the people who sell those cigarettes into the market in the first place are generally well-connected to organized crime, which means that once cigarette taxes pass the crucial threshhold and start pushing large numbers of people into the illicit market, the tax becomes nothing more than welfare for the mob.
Both Cyrillic and Chinese on the same pack, did you mean? Mongolia comes to mind, as they use both.
No, 2 different packs from 2 different gas stations. Cigarette smuggling is now global (they’re probably picked up in duty-free shops or something like that; the ones with no stamp at all might be from a military PX).
I collect coins, and love the variety of languages; I learned a lot of history and geography from them.
First off, our political class has built a largely unconstitutional bureaucracy and byzantine system of law, rules, and regulations. I daresay every adult American is guilty of breaking any number of laws, probably without even knowing it. That's a great way to keep citizens down, btw, because anyone who raises their head up can likely be prosecuted for violating some law. When the law gets that oppressive, it becomes counterproductive and encourages lawbreaking. It's a sad shame in America that people who truly want to follow the rule of law have such a difficult time, while others, illegal aliens for example, seem to get away with whatever they want.
Secondly, even if there weren't so many laws, it's impossible to obey the letter of the law in many cases. Cigarette taxes are easy to pay. What about laws like speed limits where technically someone is a lawbreaker as soon as they exceed the limit? Everyone probably breaks the law ever time they drive, because it's impossible to follow the letter of the law. On the other hand, it's still possible to try and comply with the spirit of the law. In the case of speed limits, traveling at safe speeds with the flow of traffic is possible -- the general intent of speed limits in the first place.
All that said, I do try to obey the spirit of the law so long as it doesn't force me to violate my faith. So far I haven't ran into any cases like that, including paying taxes.
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