26.7% of all cigarettes smoked in Latvia last year were contraband cigarettes. This proportion is also the lowest point since 2009, according to SUN Report published by KPMG on the spread of contraband cigarettes in EU member states, Switzerland and Norway.
Compared with 2014, the decline is significant – 2.6 percentage points. Nevertheless, the proportion of contraband cigarettes in Latvia remains the highest in the EU. Latvia’s tax losses due to contraband cigarettes are estimated around EUR 77 million.
67.2% of contraband cigarettes were smuggled to Latvia from Belarus. 23.2% came from other countries and 9.6% of contraband cigarettes were counterfeit. The most important factors that helped reduce the proportion of contraband cigarettes in Latvia in 2015 included the enhanced border control measures between EU and Russia.
Inara Petersone, the resigning head of the State Revenue Service, comments: «Results of the study are positive and allow us to conclude that intensive work done by SRS Customs officials and other law enforcement institutions has been effective and has helped achieve this result. The number of confiscated contraband cigarettes has grown 2.5 times in the past three years. The number of criminal processes launched by SRS Customs Police has increased 58% since 2013. The fact that the lowest proportion of consumed contraband cigarettes since 2009 has been achieved shows a positive trend. I wish to believe that the gradual increase in awareness and reduction of tolerance towards contraband have contributed to the increase of popularity of legal products among the residents.»
«Of course, the fact that Latvia remains one of the most popular locations for contraband cigarettes, mostly due to its geographical location, means that SRS and other law enforcement institutions should continue working with one another to combat this industry more actively,» – said Petersone.
Total cigarette consumption rates remain stable in Latvia. The slight decline is explained with the decline of contraband.
«The noose around the neck of contraband is getting tighter. This is largely thanks to the closer and more effective cooperation among government, law enforcement structures, manufacturers and retail traders. At the same time, the fact that 90% of contraband cigarettes are imported to the EU from countries outside of the union means Europe remains an attractive market for international criminal groups,» – comments Chairman of Latvia’s Chamber for Commerce and Industry Janis Endzins. «Rapid spread of terrorism worries all of us. It is no secret that contraband of cigarettes is only one of many sources of funding for terrorism. It is worth keeping in mind to everyone – policy makers, smokers and society as a whole.»