Governments losing $40 billion yearly due to cigarette smuggling

Governments worldwide are losing some $40.5 billion in revenues annually due to tobacco smuggling, a report by the International Union Against Tuberculosis and Lung Disease showed.

Based in Paris, the union’s effort has been recognized by the World Health Organization (WHO) as part of internationally-recommended Stop TB Strategy that has been used to treat 32 million people in 202 countries.

In its report, the union said some “11.6 percent of the global cigarette market is illicit and this is equivalent to $40.5 billion in lost revenues.”

“Higher income countries, where cigarettes are more expensive, have lower levels of cigarette smuggling than lower income countries, contrary to the tobacco industry claim that the overall level of smuggling is dependent on cigarette price,” the report stated.

Majority of the world’s smokers live in low and middle-income nations.

“If this illicit trade was eliminated, governments would gain, in principle immediately, at least $33 billion, and from 2030 onwards save over 160,000 lives a year, resulting from an overall increase in cigarette price of 3.9 percent and a consequent fall in consumption of two percent,” it showed.

This means that in just six years, more than a million lives from low and middle-income nations would be saved.

The report was released during the opening of the third inter-governmental negotiating body on the Protocol on the Illicit Trade in Tobacco Products in Geneva, Switzerland recently.

The protocol is the first agreement to be negotiated under the World Health Organization-led Framework Convention on Tobacco Control, the world’s first global health treaty.