Three arrests for smuggling cigarettes

Three foreigners (aged 29, 34 and 21) were arrested for selling smuggled cigarettes by members of the Athens Police Department in Korydallos.

In particular, the first two were arrested for trying (on their own initiative) to “sell the goods.” While checking the trunk of a motorcycle leaving an apartment building in Korydallos, police found a black plastic bag containing 300 packs of cigarettes and 45 packs of unmarked tobacco.

A third foreigner was found in a house that was used as a tobacco smuggling warehouse in the Korydallos area. After a search in the house, 5,060 packs of cigarettes and 661 packs of smoking tobacco were found and confiscated, which were not labeled accordingly. The motorcycle that the criminals used to carry out illegal actions was also confiscated.

As Athens News has already written, in Greece, a country of heavy smokers, cigarettes and tobacco are a gold mine for those who want to illegally earn income. A common myth is that Greece has cheap cigarettes compared to Northern Europe. The reality, however, is that the critical parameter is not the retail price, which is always linked to consumers’ disposable income. The decisive factor is the amount of taxes in relation to the retail price, and here the picture changes radically. The tax burden in Greece is 85% of the price and is one of the highest excise taxes in all of Europe. Although, of course, the excessive increase in the last decade was one of the main factors in the “violent flourishing” of smuggling on this basis.

In particular, since 2010, the tax burden on the retail price of cigarettes, after 10 consecutive tax changes, the last of which occurred in January 2017, reached 85% in 2009. Accordingly, the average price of a pack of cigarettes on the market from 3 euros in 2009 has now reached 4.18 euros, an increase of about 40%, while household disposable income was diametrically opposed.

Smuggling

The Tax Foundation’s comparative study of cigarette taxes in Europe again exposes a growing problem. As you know, there is a minimum excise tax threshold for a package, which is 1.80 euros. But most governments have imposed much higher taxes, either for financial or containment reasons (public health policy).

Ireland and France have the highest ΕΦΚ per package (8.42 euros and 6.61 euros respectively), while the average ΕΦΚ in Europe is 3.34 euros. Greece, with ΕΦΚ of 2.74 euros, is in 14th place, but that doesn’t say much, because there is a small… detail: the “flourishing” of smuggling. In addition to VAT, cigarettes are also subject to excise tax, according to a study by the Tax Foundation, causing the total amount per pack to skyrocket to 89.8%, which is … the figure for Finland.

Greece, with a final tax rate of 85% on tobacco products, is among the countries burdened with taxes, which creates an expanded “field of activity” for smugglers. The study itself cites a KPMG study that found that there were 34.2 billion smuggled cigarettes in the European market in 2020, representing 7.8% of total tobacco consumption. This resulted in a loss of €8.5 billion of related tax revenue.

What are the relative “indicators” of Greece? The country lost the first place to France, where the share of contraband cigarettes is estimated at 22.4% of the total, and the loss of income is 550 million euros. AT Greece saw a significant increase in counterfeit cigarettes to 1.62 billion in 2020 from 1.51 billion in 2019. They surpassed for the first time the category of illicit “white cigarettes”, that is, cigarettes that are legally produced but smuggled into other countries. The consumption of this second category in Greece was 1.20 billion cigarettes in 2020, compared to 1.66 billion in 2019.

The conclusions of inspections carried out on a regular basis have shown that Greece is no longer a transit center, a station of international routes for smuggling, but the country is creating illegal businesses that “manufacture” illegal tobacco products, which the authorities are actively fighting.

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