Lebanon: Illegal Tobacco Costs $200M a year

Source from:  The Daily Star 04/03/2015

The Lebanese treasury can boost revenues by up to $200 million if authorities succeeded in a campaign to crack down on tobacco smuggling, Finance Minister Ali Hasan Khalil said Thursday.

"The amount of money which is being squandered and wasted as result of tobacco smuggling ranges between $150 million to $200 million a year," Khalil said after touring the facilities of state-run tobacco company Regie.

"This should prompt the state to exert more effort to secure additional revenues to the Lebanese treasury," he said.

He praised the efforts of Regie in fighting tobacco smuggling, but added that the government and all of its institutions must also take serious measures in this direction.

Regie holds a monopoly on the production, import and export of tobacco and cigarettes in Lebanon.

Khalil and the head of the company spoke about joint efforts to crack down on tax evasion and tobacco smuggling.

Khalil said that since 2014 the Finance Ministry has adopted a strategy aimed at cracking down on the smuggling of products to Lebanon. The campaign is ongoing, he said.

He added that Regie has also proposed some modifications to the conditions for importing tobacco products and the fines imposed on companies that admit cigarettes to the country illegally.

"The Finance Ministry approved these changes and was able to generate more than $1.9 million last year from fines slapped on companies trying to smuggle cigarettes and tobacco," he said.

Khalil said that authorities carried out 415 raids against tobacco sellers across Lebanon last month and imposed more than $2 million in fees on smugglers and tax evaders.

"From March 2, and during 20 days only, 415 raids were carried out and 165 fees were imposed on smugglers," he said, adding that the fees totaled $2.3 million.

"We have set new plans for this year, and they include raising the penalties on smuggling and fining importers for all products they smuggle," Khalil said.

He added that anti-trafficking operations showed that tobacco products were smuggled through different routes, including ports and border-crossing points.

"Some of these products are not even registered in Lebanon and in some cases they do not enter through Regie but are transferred into the country by illegal means and in huge quantities," he said.

"We were also able to crack down on counterfeit products, and mainly cigars, that do not conform to the required conditions and criteria," Khalil added.

A number of machines that were used to package illegal cigars have also been confiscated.

The Finance Ministry last month offered financial rewards to any citizen who uncovers tobacco smuggling into Lebanon.

Khalil has spearheaded a campaign to end illicit practices in the Customs department and the Finance Ministry's real estate departments. Enditem