Vietnam loses $198 mln annually to tobacco smuggling

TN News

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With around 800 million packets of tobacco smuggled into Vietnam every year, the state budget loses VND4-4.2 trillion (US$189-198 million) in taxes annually, the Vietnam Tobacco Association reported.

Smuggled tobacco also causes losses to Vietnamese farmers, between VND160-170 billion ($7.5-8 million) a year, and local tobacco businesses, between VND240-250 billion ($11.4-11.8 million) a year, Tuoi Tre (Youth) newspaper quoted the association as reporting on Tuesday.

More than 2.7 billion packages of tobacco have been consumed in Vietnam over the first eight months this year, nearly a quarter of which were imported illegally.

Last year Vietnamese people consumed over 4.1 billion packages, including 910 million, or 21.6 percent, that were smuggled, the association reported at the meeting held by a central committee on smuggled and faked goods.

Every year, anti-smuggling forces are funded with VND3-9 billion ($142,000-426,000), but only some 1 percent of smuggled tobacco is detected and destroyed in accordance with laws, which is a "very low rate," according to the association.

Meanwhile, the central committee and market management division representatives said that there were problems in fighting tobacco smuggling like a dearth of personnel and the low awareness of people living in border areas about the bad effects of smuggling.

Vu Van Cuong, chairman of the Vietnam National Tobacco Corporation, said local producers are capable of making products with the same quality as foreign ones, but locally-produced tobacco cannot compete with them in terms of prices.

Under Vietnamese laws, tobacco is hit with a special consumption tax of 65 percent and a value-added tax of 10 percent.

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