Each year the illegal trade in contraband tobacco goods cause member states around 11 billion euros in losses. Worse still, the profits gained in the illegal trade are often used to finance terrorism, military groups and activities that pose clear threats to EU states and their democratic civic values in general.
The release notes that in 2014 Latvia’s retail markets handled altogether 1.86 billion cigarettes, collecting into state revenues almost 161 million euros (166.2 million including all additional tobacco products).
The illegal share of this market is estimated to have comprised 650 million cigarettes, the sale of which should have, but didn’t result in fiscal revenues worth about 56 million euros. This is a “serious threat to our state budget and thus our ability to improve the welfare of our people and develop economic growth,” says the statement.
The release praises the work of the State Revenue Service (VID) which has brought the share of the illegal cigarettes in Latvia down to 27.4% of the national market, the lowest showing in five years. Still, the percentage is comparably high alongside other EU member states.
The fight against contraband depends on international cooperation amongst the appropriate authorities. The ministry cites the Riga declaration, taken in May during a high-level meeting of customs officials under the Presidency of the Council of the EU, which calls for “common, clear and consistent strategy and activity” to encourage economic, military and social security.
In conclusion, the ministry urges all responsible authorities in Latvia to undertake the goals of the Riga declaration to strengthen their capacity and cooperation to reduce the security risks of the contraband trades.