Baltic, Latvia, Legislation, Markets and Companies, Transport

It means that in fact every fourth cigarette smoked in Latvia has been brought into the country illegally and without payment of excise tax or value-added tax. According to various estimates, the loss to the Latvian state from the contraband cigarettes may be as high as EUR 70 million. For comparison, the share of contraband cigarettes in Lithuania was 19.8% in the third quarter of this year.

Compared to the second quarter of 2017, cigarette contraband in Latvia has increased by 3.2%. The highest share of contraband cigarettes (52%) has been observed in Daugavpils, the second largest city in Latvia in southeast of the country close to the borders with Belarus and Russia. In the Latvian capital Riga, the share of contraband cigarettes in 23% of the total market.

Despite the efforts of the law enforcement authorities which seize millions of contraband cigarettes almost every day, Latvia still has the highest share of cigarette contraband among all EU member states, says Janis Endzins, the chairman of the Latvian Chamber of Commerce and Industry, noting that ill-considered excise tax policy was likely to boost contraband instead of bringing additional revenue to the state budget.

The largest amounts of contraband cigarettes smuggled into Latvia still originate from Belarus - 66.5%, and Russia follows with 10.7%.