Legal Sale of Cigarettes Dropped 40 percent

By , 11 Mar 2018, 22:22 PM Business
Difference in prices enables smugglers to make big profits: From a street sale Difference in prices enables smugglers to make big profits: From a street sale PHOTO: SAVO PRELEVIC

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Legal importers and retailers said that, for time being, they will not expose themselves because they believe that the government will react accordingly.



“Legal sale of cigarettes in January and February of this year has dropped for 40 percent in relation to the same two months in 2017," Vijesti was told by representatives of the largest distributors whose names do not want to be published in public, because they believe the government will take appropriate measure.

Anticipated chaos on the tobacco market in Montenegro, after three significant increases of taxes in the import and sale for cigarettes, after more than a year, has lasted for months, and the more significant part of it goes to the smugglers all over Montenegro.

During November and December, the sale of cigarettes at the kiosks dropped 20 percent, and manufacturers returned excise taxes stamps to some importers at the end of last year because warehouses were very jam-packed, and it was not likely they would sell the new orders.

It seems that smugglers of cigarettes got their “five minutes of glory”, and some of them have the interest and calculation to make a profit, based on the difference in prices, to buy them legally in Serbia, and then sell the same illegally in Montenegro.

For example, the widely popular brand “Marlboro” costs 3,6 euros at the kiosks and only 2,4 euros on the street. At the end of the current year, the difference in prices will be higher if the Government fulfils its EU calendar and if for each pack of cigarettes, adds a new excise tax, i.e. a total of new 40 cents.

Beginning January 1st this year, the last increase of excise tax on cigarettes resulted in the increase of prices per pack in amounts from 30 to 50 cents. The total tax per a pack of cigarettes’ selling price is more than 80 percent.

A pack of the cheapest cigarettes in a legal sale is around 2,4 euros while on street sale it is about 1 euro.

Last year, the excise tax increased on two occasions - first in April, then in August, therefore, the warehouses in Montenegro have been, together with December, full of cigarettes, not per schedule, at least three times. Thus, the official statistics at the end of 2017 does not reflect the real status of what was happening.

The government’s Bureau for public relations was not available for responses to questions from the department of the ministries for Agriculture and Finance Milutin Simovic and Darko Radunovic.

Simovic, who is also vice-president of the Government for the economic system, is chairman of the Committee for combating the grey economy.

They did not reply to how many cigarettes were imported, and how many were sold in the first two months of this year, how much the import of cigarettes dropped in the first two months of 2018 and how much the sale dropped at the domestic market in relation to the last two months in 2017 (November and December), and also, in relation to the first two months (January and February 2017).

Additionally, there were no replies from the Government on how much the state charged for taxes in the first two months of 2018 (VAT, customs and excise taxes) from the tobacco industry only concerning the first two months in 2017.

Last night the Government stated that the budget of Montenegro is in a much better state this year than it was in the previous year and also better than planned.

“In the first two months of 2018, the increase is 16,1 % (26,8 million euros) concerning the same period last year, i.e. 6% increase (11 million euros) of what was planned. In the overall structure of the profits, the share gained from excise taxes is satisfactory," the government said.

In the reply, they stated that this is the total charge gained from the excise taxes, mostly increased from January, not only for tobacco products.

AUTHOR: Milorad Milošević, By Vijesti

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