15min studio discussed the challenges of preventing illegal tobacco trade and possession with Deputy Minister of Finance Lukas Jakubonis and Health Minister’s advisor Aušra Želvienė.
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The studio also discussed a 15min editorial experiment, where people were asked at markets in Vilnius and Kaunas if they knew where to buy cigarettes “cheaper.”
– Recent studies show that more than one-fifth (23%) of tobacco products entering the market are illegal. How can these numbers be assessed from a financial perspective?
L.J.: Of course, Lithuania has a problem with illegal cigarettes, and now alternative smoking products are also noticeable, which is also a problem. For the state, these are losses – if a person gets sick, money is needed – for defense, pensioners’ needs, and teachers. So if a person does not pay taxes, they do not contribute collectively to society’s needs as they should.
Speaking about the illegal tobacco product market, today we should divide it into two parts. One is smuggling, and the other – an even larger part – counterfeit cigarettes. They exist, and as we know today, they are mostly transported from Latvia, Poland, and there are illegal factories in Lithuania as well – they have been recorded and closed in the past.
So – one is what enters through the Belarusian, Russian border, the other is what is produced illegally, which means excise is also not collected.
The state loses definitely more than it should because of this. Reducing it to zero is probably impossible, but fighting effectively and reducing the numbers we see now is possible.
– How can the situation be assessed from a health perspective? Despite smoking generally harming health, much is said about products of unclear origin being even more harmful.
A.Ž.: Smoking harms health – that is unequivocal. If we talk about an adult smoker, they probably know what consequences to expect, but if they smoke illegal products, the consequences can be unpredictable. And if we talk about new products that are more popular among children, the problem inflates and expands in terms of health.
Often it is not clear that smoking is actually happening. It is unclear what is in those products, plus – they are mixed with drugs. And even if not mixed with drugs, something unknown is still done, so the consequences are also completely unclear.
Cannot buy, but manages to: can Lithuania effectively curb tobacco trade among youth?
WE NEED TO TALK. About strange proposals
– Is it true that the ways smuggling enters our country are becoming increasingly ingenious?
L.J.: The criminal world always finds new ways to bypass existing control measures. It is probably an eternal cat and mouse game. Institutions find ways to block one window, but another appears through which the criminal world operates.
Despite that, we must make it as difficult as possible for the criminal world to operate. This will increase the price of illegal products, so this is not a fight against windmills. From some point, smuggling becomes unprofitable. But then, as I mentioned, other means appear – counterfeiting, creating factories, producing.
– What actions need to be taken to make smuggling routes unprofitable?
L.J.: Smuggling is when products are illegally brought across the border, and illegal products are another matter – they cannot always be considered smuggling. They are simply counterfeits. What is needed is a good question – I have also raised it to the customs system. What is needed so that the majority of tobacco products are legal?
The challenge is neighbors – when the cost price of cigarettes in Belarus is five times lower.
I asked to prepare a strategy on how we will fight this for 3 or 5 years? To be able to control imports and the appearance of illegal tobacco products in Lithuania, we must have a strategy with clear measures and coordinate it with other institutions.
– Speaking about strategy, probably the biggest challenges need to be identified – what are they?
L.J.: The challenge is neighbors – in Belarus, the cost price of cigarettes is five times lower, we must have either very strict measures that cut through all civil life – for example, limit the number of incoming persons, freight transport, etc., but no one is ready to take such measures.
As long as there is such a price difference, we will not have 100% excise collection and a situation where there is no illegal tobacco. On the other hand, the goal is to reduce control measures, and which ones – institutions need to be asked. I think what exists now and what we plan to have contributes to a more transparent system and its improvement.
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