GAMA regards illicit trade in tobacco products as a very serious problem:
- Illicit trade in tobacco products has reached unmatched growth over recent years.
Studies estimate that approximately 11% of the world cigarette market is illicit,
representing over 600 billion cigarettes a year and resulting in annual government
revenue losses of over US$40 billion (Framework Convention Alliance, 2008).
- Recent figures from the WHO also demonstrate that many countries are experiencing
problems related to counterfeiting of cigarettes. As much as 40 % of the products in
some countries is estimated to be smuggled into these countries (WHO, 2012 Global
Progress Report on implementation of the WHO Framework Convention on Tobacco
Control, 2013 ).
- More than half of the countries who have signed up to the WHO Framework
Convention on Tobacco Control confiscated illicit tobacco products during 2012
(WHO, 2012 Global Progress Report on implementation of the WHO Framework
Convention on Tobacco Control, 2013 http://www.who.int/fctc/reporting/2012_global_progress_report_en.pdf).
Illicit trade results in large amounts of tax revenues being lost. It hinders economic
development, weakens government policy objectives and the rule of law, supports corrupt
practices, funds organized crime and terrorism and encourages the expansion of criminal
activity. In addition, it undermines investment in manufacturing, innovation, trade and
distribution by the legitimate industry and negatively impacts employment.