Auditors say fragmented enforcement leaves billions in revenue at risk
The EU lacks a clear picture of the revenue lost to illicit tobacco trade because existing mechanisms to combat it are ineffective, according to the European Court of Auditors (ECA), which is pressing the Commission to act.
The ECA’s report comes amid intense discussions among EU countries over raising tobacco taxes across the bloc. The industry claims that higher taxes fuel black markets, while Brussels and the World Health Organisation insist that the two are not linked.
Petri Sarvamaa, the ECA member leading the audit, said that if Europe is serious about safeguarding citizens’ health, wallets and security, then “the Commission and member states must up their game to fight criminal activity head-on”.
Citing data from the Commission’s DG TAXUD, the ECA estimates that the EU and its member states lose €13 billion in budget revenue annually to the illicit tobacco trade. “But these estimates must also be interpreted with caution,” the ECA said.
