SIPA asked to fight against cut tobacco crime

Several tobacco product companies have asked the Agency for Investigations and Protection (SIPA) for urgent action against the illegal trade of untaxed cut tobacco. In the report sent to SIPA, it was stated that the research showed that the loss for the state budget was 69.2 million KM.  

Among other things, the tobacco industry further states that the explosion of illegal cut tobacco on the market of Bosnia and Herzegovina marked 2013. Since government agencies have not yet offered estimates of the damage caused by this negative trend - tobacco companies operating in BiH hired a prestigious market research agency "Ipsos" to conduct an independent research study on the size of the illegal tobacco market and the resulting losses.

The research was conducted in September 2013, covering 1,541 households throughout the country (a total of 3,983 respondents over 18 years of age), as well as visits to 259 markets. The research showed that the market for untaxed cut tobacco accounts for almost 8 percent of the total tobacco product market in BiH.

It is estimated that in 2013, 647 million cigarettes made from untaxed cut tobacco were consumed. BiH lost at least 69.2 million KM in 2013 through taxes (excise duties and VAT) that were not paid to the state. Untaxed cut tobacco can be bought at 64 percent of the 259 markets in BiH - an average of 4 sellers of illegal cut tobacco are found at one market. In most cases, illegal tobacco is visibly displayed at market stalls.

The growing trend of supply and consumption of illegal cut tobacco also harms those in the legitimate business chain (from farmers, through producers to traders) - making financial losses significantly higher than the stated 69.2 million KM.