The various curbs on cigarette smoking result in other headaches for the governments

Today despite all the measures like banning cigarette advertising and setting purchase restrictions, the most effective way to preserve the health of the nation is raising the taxes and the price of a cigarette pack. Scientific researches show that the raising of the cigarette prizes results in lower overall cigarette consumption. The increasing of prices affects mostly minorities, low-income smokers, and most important the Youth. For example a 10% increase in price, reduces the overall cigarette consumption by 3% to 5%. So the governments try to solve the problem with smoking by raising the taxes on cigarette packs and this triggers another problem –smuggling. Naturally when the prices are rising, the illegal importers get more and more possibilities every day. When the government is raising the price it is basically rising the tax, the price of a pack remains constant. In the United States this tax can vary from $0,7 to bout $4,0 in different states. So smuggling exists even between the states. But before we move on with this topic let us define the terms. Mostly people view smuggling as similar to illegal trade, but there is a difference. Legally the term is defined as following: smuggling is an international trade through ‘unauthorized route’ (A seaport, airport or land port which has not been authorized by the government for importation and exportation).

 

If we look through the recent headlines we will see that the number of disturbing cases that shows that Cigarette smuggling has increased in North America and Europe with the latest tax raises. On May, 16 the Royal Canadian Mounted Police (RCMP) seized around 1.75 million contraband cigarettes near Manitoba - Ontario border. On the same day across the border in the United States New York City Police Department (NYPD) also ceased 1.17 million cigarettes. Together it makes around 3 million in one day and the fact that one truckload of smuggled cigarettes can lead to a profit of $2 million dollar increases the motivation of smugglers. The illegal smuggling of tobacco leads to thousands of dollars in lost tax revenue to governments. In Manitoba for example it is estimated that over $300,000 are lost in tax revenue from illegal cigarette sales. By the way the taxes collected from tobacco sales usually are frequently used to pay for tobacco use prevention programs. Canadian officers ceased not only illegal unmarked cigarettes but also the so called "discount" brand cigarettes. These types of goods usually come from third world countries and are another way of smuggling tobacco. As for the other recent cases only on this week 90,000 contraband cigarettes were seized from Lithuanian travelers at the Dublin Ireland airport and in Ontario Provincial Police recovered 160,000 unmarked cigarettes from a man in Manitoba. As for the United States in April American officials discovered a warehouse containing illegal tobacco worth about $20 million dollars. So as you see the numbers are dramatically increasing and the more the governments tries to protect the health of the nation, the more losses it brings to them.

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