According to IOBE, reducing the illicit trade in alcohol by 20% will bring an additional 28.6 million euros to the state treasury.
A blow to the public treasury, as well as to the survival of businesses, is the rise in smuggling of cigarettes and alcohol in Greece. High taxes on these two categories of goods “cause appetite” for their illegal circulation. Moreover, in addition to annually lost revenues from the state treasury, counterfeit products pose a danger to public health.
Despite the fact that checks are constantly carried out and large volumes of smuggling and illegal products are revealed, the problem continues and, like the Lernaean hydra, one head is cut off and two new ones grow.
In 2022, the Greek prosecution authorities conducted 39,476 inspections, during which 3,236 violations were identified, 844 million cigarettes and 321 tons of tobacco were seized. While AADE alone in 2022, 60.1 million cigarettes were detected and confiscated, with related taxes and duties in the amount of 12,513,401 euros.
In the first quarter of 2023, employees ELAS began to liquidate the criminal organization engaged in the production and circulation of contraband tobacco products. During operational activities, 11.5 million cigarettes and 20 tons of processed tobacco were confiscated, and the amount of unpaid taxes amounted to 2.5 million euros.
The main reason for smuggling is the excessive taxation of legal tobacco products, which, combined with the economic crisis in recent years, has pushed smokers to cheaper substitutes for legal cigarettes.
A KPMG study even showed that in 2021 in EU 3.4 billion illegal cigarettes were consumed, which corresponds to 24% of total consumption.
Similar picture in the market alcoholic beverages. It is significant that in 2022, during 36,874 inspections by the prosecution authorities, 1,945 violations were identified and 554,362 liters of illegal alcoholic products seized. 19,200 liters of ethyl alcohol, with related taxes and duties in the amount of 589,000 euros, were identified and confiscated by ELAS with the assistance of AADE in the last quarter of 2022.
According to market experts, high taxes on alcohol also encourage illegal trade. The IOBE study estimates that up to 28.6 million euros could be contributed to the state treasury through a 20 percent reduction in the illegal alcohol trade annually.
According to businessmen in the industry, tax increases carried out in previous years have led to a shift in the market share of alcoholic beverages, and enterprises in the industry have experienced a 51% drop in consumption from 2010 to the present.
The IOBE study, conducted last July, says that according to the World Health Organization smuggling accounts for about 11% of the total market.
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