Baltic States – CIS, Legislation, Lithuania, Markets and Companies, Transport

Illegal imports of cigarettes may have deprived the Lithuanian budget of over 60 million euros in uncollected excise duty alone.

Smuggled cigarettes accounted for 19.6% of the total tobacco consumption in the country in the last quarter of last year, up by 2.1 percentage points year-on-year, the National Association of Tobacco Producers (NATP), said in a press release on Thursday.

"The illicit tobacco market started swelling again and now accounts for almost a fifth of the market. By raising the excise duty on cigarettes more than demanded by the EU, Lithuania is pushing its residents to turn back to the illicit tobacco market and reduce the budget revenue generated by excise duty," NAPT executive director Arnas Marcinkus said in a press release.

As much as 85% of the illicit cigarettes arrived in Lithuania from Belarus, as cigarettes produced in the neighboring country accounted for 16.8% of all cigarettes smoked in Lithuania. In Marcinkus' words, most of the Belarusian cigarettes entering Lithuania come from the Belarusian factory Grodno Tobacco.

The minimum excise duty on cigarettes will grow by 5.4% o 59 euros in March, with the combined tax to rise by 6.7% to 96 euros per 1,000 cigarettes. Excise on cigars and cigarill o s will jump 12.1% to 37 euros.

Nielsen conducted the survey for four tobacco companies in 20 Lithuanian cities and towns. The survey did not cover rural areas.