New tax on cigarettes is intended to reduce illegal sales to Serbia, but it won't stamp them out.
Jump to full article: Institute for War & Peace Reporting (uk), 2003-10-04
Author: Tatjana Matic in Pristina and Hugh Griffiths in Sweden (BCR No 462, 03-Oct-03)
Intro: United Nations administrators have acted to reduce the huge volume of cigarettes smuggled out of the country but the move is unlikely to stop the illicit trade, especially across the porous border to Serbia.
On October 1, the UN Interim Administration Mission in Kosovo, UNMIK, raised excise taxes by two-thirds as part of measures designed to combat cigarette smuggling in the Balkans.
Importers will now pay 10 euro for every 1,000 cigarettes they bring into the protectorate. This is the second and final stage of an excise reform which saw excise rates raised from two to six euro on July 1. . .
The smugglers don't seem to be too worried by the changes. "UNMIK is just trying to frighten us, nothing real will happen," IWPR was told by a man who is one of the biggest smugglers in Mitrovica, northern Kosovo. "We will need two or three days to make fake banderols, and if you don't think we have our own people in UNMIK, you are wrong."
Another innovation is that health warnings on cigarettes intended for Kosovo will be in both Albanian and Serbian, which Robertson says will make them "a far less attractive product for Serbian consumers". However, IWPR has seen packs marked in Albanian being sold openly in the Serbian town of Kursumlija, with little negative consumer reaction.
"Dual health warnings will hardly stop cigarette smuggling into Serbia," said Nebojsa Medojevic, economic director at Montenegro's Centre for Transition, "Foreigners would be naive to think that one can stop smuggling with the introduction of a marketing act.
"Cigarette smugglers are very well connected across the region's de facto borders. They have almost reached EU standards in terms of free flow of goods and people in this region. Governments are lacking this level of cooperation."
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