Increased controls from the Indirect Tax Administration and other law enforcement agencies have drastically reduced the “black market” of tobacco and tobacco products in Bosnia and Herzegovina. The value of confiscated tobacco and cigarettes in the last five years is about 12 and a half million marks. By bringing down the black market to an acceptable level, record revenue from excise duties is expected this year, which should exceed one billion marks for the first time.
The closure of the Port of Bar in Montenegro, which was the main supplier of illegal cigarettes to the entire region, the intensification of actions in which, in addition to cigarettes, several machines for their preparation and packaging were confiscated, affected the difference between the prices of tobacco and tobacco products traded on legal and illegal market almost melted.
SAŠA GRABOVAC, Association of Economists SWOT
“The smaller the difference between the prices in legal distribution channels and those in black, gray channels, the motivation for people who engage in this type of illegal business, illegal trade, among other things, tobacco and tobacco products, simply if that difference is small and the motive decreases .”
The evident reduction of the “black market” is best illustrated by the data on the number of excise stamps issued for tobacco and tobacco products.
“In 2020, the Administration issued 171 million excise stamps for marking tobacco and tobacco products, and in 2023, 270 million stamps, which is an increase of 57 percent. The growth in the number of issued excise stamps continued this year,” the Administration for indirect taxation (ITA) of BiH.
The increase in the number of issued excise stamps is actually the transfer of a significant part of the “black market” into legal flows. Of course, this is accompanied by an increase in revenue from excise taxes.
RATKO KOVAČEVIĆ, Directorate for Indirect Taxation of Bosnia and Herzegovina
“In this year 2024, we expect that for the first time we will exceed the figure of one billion KM just on the basis of excise taxes on tobacco and tobacco products. It is really a matter of significant revenues, because I will say that all levels of government in Bosnia and Herzegovina are financed from these revenues. ”
The black market has shrunk, but not disappeared. The flow has decreased, and so has the sale of cigarettes without an excise stamp, but that’s why the sale of illegal tobacco and cigarettes, which are filled with the same tobacco in tubes, and which can be bought on almost every corner, is flourishing.
ZINAIDA BABOVIĆ, manager of corporate affairs and communications at JTI
“In all cities you can find in the markets, on the streets, sellers who sell cut tobacco whose source is unfortunately unknown, and of course cigarette tubes filled with cut tobacco.”
ZORAN ĐOKIĆ, manager for the fight against illegal trade in tobacco products for the Western Balkans
“Tubes serve no purpose except to make a cigarette, and unfortunately those tubes are imported uncontrolled and a huge amount of them are on the market and are not adequately taxed. It is actually a cigarette in parts. The other element is tobacco.”
Until a few years ago, the tobacco “black market” made up half of the total market, mostly thanks to the wrong excise policy, which caused us to have the most expensive cigarettes in Europe, compared to the standard of citizens. This policy led to the collapse of the domestic tobacco industry, the flourishing of the black market due to which at least half a billion marks a year, instead of the state budget, ended up in private pockets, BHRT writes.
