2012-04-13 11:21

High taxes and low income seen as main engines of smuggling in Baltic countries

The citizens of Lithuania, Latvia and Estonia believe that smuggling is mainly caused by high taxes, which do not match the living standards, a poll commissioned by the Lithuanian Free Market Institute (LLRI) has shown.
Rūkalai rate
Cigarettes inside a tyre. / VSAT nuotr.

People in the Baltic countries think that the main reason of smuggling is a possibility to cash in on differences in prices between the Baltic countries and the neighboring countries that do not apply high excise duties on fuel, beverages and cigarettes, which are mandatory in the European Union, according to the poll conducted by the market researcher Spinter Tyrimai.

This reason, as the engine of smuggling, was chosen by 50 percent of respondents in Lithuania, 54 percent in Latvia and 51 percent in Estonia.

“People choose similar reasons of smuggling in all Baltic countries. Factors favorable for smuggling, such as big differences in prices compared with the neighboring countries, relatively low household income and high prices of legal goods, can be found in Lithuania and in other Baltic countries at the same time,” LLRI expert Vytautas Žukauskas said at a news conference on Thursday.

Almost two-thirds of Lithuanians said that the consumption of smuggled cigarettes had increased in Lithuania in the last three years, as compared with 54 percent in Latvia and 35 percent in Estonia.

Moreover, 62 percent of Lithuanians agreed that the consumption of smuggled fuel had increased in the same time span, as against 49 percent in Latvia and 32 percent in Estonia.

As regards smuggled spirits, an increase in consumption was mentioned by 43 percent of the polled in Lithuania, 45 percent in Latvia and 26 percent in Estonia.

Asked to specify the most efficient way to fight smuggling, people in the Baltic countries mentioned the reduction of taxes.

Spinter Tyrimai polled 3,056 people permanently residing in Lithuania, Latvia and Estonia in February.

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