Peter Imre, Philip Morris: "Tobacco Contraband Is becoming Institutionalized"

Cigarettes confiscated by Romanian Customs account for only two percent of the overall volume of tobacco contraband entering the country, which means that the risk exists to see contraband become "institutionalized," according to Philip Morris Director of Corporate Affairs Peter Imre. "The alarming volume of contraband is determined by the increase in excises, because the annual amount of 1.6 billion euro that the Government collects from excises is paid exclusively by the seven million consumers," Imre said.

According to him, the increase in excises is expectably deterring smoking, which has direct effects on the leading tobacco companies. "Increasingly more tobacco companies are starting to believe that there is no point in continuing their business and this trend is very likely to reach Romania, too," Imre further explained.

He exemplified stating that the duty-free shops on the borders with the Republic of Moldova, Ukraine and Serbia were obvious contraband hubs.

In turn, Philip Morris International Director of Fiscal Affairs Philip Gambaccini believes that the minimum tax on cigarettes applied in Romania is not operational because it is too low. Gambaccini explained: "The minimum tax in Romania is 6.4 RON/pack, which is one of the lowest applied in the European Union. In order for this tax to be functional, it needs to be increased above the current 91 per cent to 100 per cent."

Regarding the value-added tax applied in Romania, Gambaccini stated that the country was above the 15 per cent level established in the European Union.