Vladisavljevic, Marko and Zubovic, Jovan and Jovanovic, Olivera and Djukic, Mihajlo and Trajkova Najdovska, Natasha and Pula, Ereza and Gligoric, Dragan and Gjika, Aida (2022) Tobacco tax evasion in Western Balkan countries: tax evasion prevalence and evasion determinants. Tobacco Control.
Full text not available from this repository.Abstract
Background and objective Tobacco tax evasion
undermines the goal of tobacco taxes as a tobacco
control measure to make tobacco products less
affordable, increases the health risks for those who
smoke and decreases the government revenue. This
paper analyses the tobacco tax evasion in six Western
Balkan (WB) countries: Albania, Bosnia and Herzegovina,
Kosovo, Montenegro, North Macedonia and Serbia. The
aim of this research is to estimate the size of the illicit
market and identify the main determinants of tax evasion
activities in the Southeastern European region.
Data and methods Data from 2019 Survey on
Tobacco Consumption in Southeastern Europe (STC-SEE)
are used. STC-SEE
provides uniquely comparable
nationally representative data on smoking behaviour for
adult (18–85 years old) population for each country. Tax
evasion is defined on the basis of available information
on tax stamps, health warnings, price and the place
of purchase, in accordance with the previous research
on tax evasion. In order to estimate the determinants
of illicit purchases we use binary choice model of tax
evasion.
Results The study finds that 20.4% of all current
smokers in WB countries evade taxes on tobacco
products, with evasion being much more frequent
for hand-rolled
(HR) tobacco (86.7%) than for the
manufactured cigarettes (MC) (8.6%). While HR is
predominantly illicit in all six countries, MC evasion varies
significantly, with evasion being significantly higher
in Montenegro and Bosnia and Herzegovina. Results
further suggest that tax evasion is higher in the statistical
regions where institutional capacities to tackle illicit
trade are lower, in municipalities bordering countries
with high MC evasion, as well as among smokers
with low income, women and elderly. We also provide
evidence that higher tobacco taxes and prices do not
increase illicit consumption.
Conclusion The findings from the research suggest
that in order to decrease tax evasion, governments
should put additional effort to strengthen institutional
capacities to tackle illicit tobacco markets. Furthermore,
improving regional coordination in development and
implementation of tobacco control policies, including
the prevention of illicit market, is essential in lowering
evasion in all WB countries. Finally, WB countries should
regulate and enforce excise tax stamp requirements on
the HR tobacco market to a much higher degree.
| Item Type: | Article |
|---|---|
| Subjects: | Scientific Fields (Frascati) > Social Sciences > Economics and Business |
| Divisions: | Faculty of Economics |
| Depositing User: | Prof. d-r Natasha Trajkova |
| Date Deposited: | 09 Jan 2023 09:02 |
| Last Modified: | 09 Jan 2023 09:02 |
| URI: | https://eprints.uklo.edu.mk/id/eprint/7586 |
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