Finance and customs officials from the Balkan countries are set to gather in Kosovo later this week for a United Nations-hosted meeting on ways to combat cigarette smuggling, which has contributed to a significant loss in revenue for several governments in the region and a consequent drop in funds available for public services.
“Cigarette smugglers are stealing from the people of Kosovo, and we are talking big bucks here,” the head of the UN Interim Administration Mission in Kosovo (UNMIK), Michael Steiner, said Monday. Mr. Steiner had proposed holding the conference, set to get under way on Friday in Pristina, as part of UNMIK’s priority to combat organized crime and corruption and to create conditions for economic growth.
“It is a problem which can only be dealt with comprehensively, at the regional level,” he added, as finance ministers and customs directors from Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro, Serbia, and the former Yugoslav Republic of Macedonia are expected to discuss practical and coordinated steps to end the region-wide practice of avoiding taxation on the transport and sale of cigarettes.
Of the €105 million (euros) collected each year in excise taxes in Kosovo, at least €20 million comes from levies on cigarettes. Customs officials in the province estimate that €8 million is eluding customs control every year, an improvement over the past, when as much as €30 million may have escaped collection during 1999-2000.
According to UNMIK, due to improved efforts at tax collection, as well as the reduction in the tax rate on cigarettes coming into Kosovo, the share of excise tax generated by cigarettes has grown dramatically – from 1 per cent of excise tax revenues collected in 2000 to more than 13 per cent this year.