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AUTHORITIES PLANNING MEASURES TO COMBAT 'SERIOUS PROBLEM' OF CIGARETTE SMUGGLING ON EASTERN BORDER

Price hikes to lead to more smuggled smokes

WITH taxes set to rise soon on 'short' 70-millimetre cigarettes, Slovak authorities are bracing for an increase in illicit imports, as smugglers try to meet the local demand for cheaper tobacco products.
In January 2003 the price of a pack of short cigarettes in Slovakia will increase by Sk5, or Sk0.25 per cigarette. The move is part of changes to legislation the country is implementing as it prepares to join the European Union (EU), scheduled for May 2004.
The tax increase on short cigarettes was approved by parliament in November, and it puts short and standard (80-millimetre) cigarettes in the same 32 per cent consumer tax bracket. Slovakia is committed to increasing taxes on cigarettes until they reach the 62 percent tax level common for tobacco products in EU member states.


MORE than 16.5 million smuggled cigarettes have been seized by Slovak officials this year.
photo: TASR

WITH taxes set to rise soon on 'short' 70-millimetre cigarettes, Slovak authorities are bracing for an increase in illicit imports, as smugglers try to meet the local demand for cheaper tobacco products.

In January 2003 the price of a pack of short cigarettes in Slovakia will increase by Sk5, or Sk0.25 per cigarette. The move is part of changes to legislation the country is implementing as it prepares to join the European Union (EU), scheduled for May 2004.

The tax increase on short cigarettes was approved by parliament in November, and it puts short and standard (80-millimetre) cigarettes in the same 32 per cent consumer tax bracket. Slovakia is committed to increasing taxes on cigarettes until they reach the 62 percent tax level common for tobacco products in EU member states.

Officials say that cigarettes are smuggled to Slovakia through the country's eastern neighbor Ukraine. As Ukraine is not an EU candidate country, its taxes on cigarettes are not subject to any rises. Accordingly, border police and customs authorities are preparing to face increased attempts to run tobacco across the border.

Local cigarette vendors and distributors believe cigarette smugglers are going to seize the opportunity to see their revenues grow.

"The increased price of cigarettes is going to have an economic impact on smokers. This will then create a perfect breeding ground for criminals dealing in smuggled cigarettes," said Miloš Macega, president of the Slovak Association of Tobacco Products Distributors (ADTVS).

Police are also expecting increased smuggling efforts, admitting that they are readying measures to make life difficult for smugglers.

"As a result of the increased cigarettes prices it is certainly possible that we will see increased demand by consumers for smuggled cigarettes and thus greater attempts by organised groups of individuals to smuggle them [to Slovakia]," said spokeswoman with the Interior Ministry Alena Koišová, speaking on behalf of the Police Force's property-crime section.

Silvia Balázsiková, spokeswoman with the Slovak Customs Office agreed.

"We are taking this threat very seriously and we have already prepared a number of measures that will take effect in January in order to eliminate as many smuggling attempts as possible," Balázsiková said.

Both Balázsiková and Koišová, however, refused to specify what measures they were preparing.

"The measures themselves cannot be published because that would then deem them ineffective and useless," Koišová explained.

Last year, when similar hikes in the price of cigarettes were approved, local police and customs offices strengthened guards on the Slovak-Ukraine border, which then-Interior Minister Ivan Šimko described as "full of holes".

About 16 million cigarettes per year were seized by customs officers during the last three years. This year alone more than 16.5 million cigarettes have been apprehended by customs officers, which is more than 82,000 cartons of 10 packets of cigarettes, amounting to a duty debt of Sk37.2 million ($907,000).

According to Macega, Slovakia's consumer cigarette market is estimated to reach 9 billion cigarettes per year. Officials were unable to estimate, however, what proportion of these cigarettes come from illicit imports.

But a businessman who has been in the tobacco business for more than 10 years told The Slovak Spectator under condition of anonymity that in the 1990s there were times when 20 per cent of cigarettes available on the market were smuggled.

"The eastern border with Ukraine was guarded catastrophically badly [at that time]. The situation may have improved over the last few years, but there is still a lot of work to do on that border," the businesman said.

Interior Minister Vladimír Palko recently announced that Slovakia was going to invest in a Schengen Treaty border system - an interconnected network covering the borders of EU countries - in preparation for the country's EU entry in 2004.

Macega of the ADTVS praised the decision, stating: "We need to improve the protection of that [eastern] border because if we don't, the EU might even impose sanctions on us."

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