Régie lost half its sales due to smuggling. $200 million annual losses from illicit cigarettes

Régie lost half its
sales due to smuggling
$200 million annual losses from illicit cigarettes
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Sales by the Régie Libanaise des Tabacs et Tombacs (Régie), the State-owned tobacco monopoly, have dropped by 46 percent in the last five years. This is attributed to smuggling of imported cigarettes, which increased from six percent in 2012 to 30 percent last year, according to Régie.

Nassif Seklawi, Director General of Régie, said that the state’s loss from the illicit trade of cigarettes is around $200 million annually. Around 7,000 violation tickets were issued to smugglers. “Illicit trade is threating whole economic sectors,” he said.

The main reason behind the increase in smuggling is the rise in the price of cigarettes, according to Seklawi. The government imposed a LL250 tax on imported cigarettes last year.

Last year Régie adopted several procedures that helped in combating smuggling. These measures mainly involved improving the local industry and producing cigarettes that compete in quality with international offerings, and signing agreements to produce international brands locally. The Ministry of Finance has also obliged the importing companies to bear the cost of illicit cigarettes, and its custom fees.

Seklawi proposed several measures to be adopted to fight smuggling. He said that a committee should be established including all security and judicial parties to cooperate towards better investigation and control. He suggested that several laws and regulations should be updated to fight illicit trade. “The law fines the smuggler, but does not incarcerate him,” he said.
Reported by Rania Ghanem
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Date Posted: Mar 29, 2018