Lost Cigarette Tax Revenue in the European Union

In 2011, an estimated 65 Billion cigarettes were smoked in the European Union that was smuggled and purchased on the black market.The black market cigarettes caused a loss of tax revenue of $1.2 Billion (1 Billion Euros) for the EU budget and up to $11 Billion in lost tax revenue for EU member states.

Sales of black market cigarettes in Spain increased by 300 percent in 2011, with 4.6 Billion cigarettes being sold illegally. In Ireland, the market for smuggled cigarettes was 17 percent of the total cigarette market in 2011.

Worldwide, cigarette smuggling causes losses in tax revenue of $50 Billion.

Source: Stephen Castle and Doreen Carvajal, “Europe‚Äôs Downturn Creates Unlikely Smugglers,” New York Times, July 11, 2012.