Vietnam top consumer of illicit tobacco in 2012: report

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Vietnam, along with Pakistan, was top consumer of illicit cigarettes in 2012, according to an international study compiled by the International Tax and Investment Center and its partner, Oxford Economics.

Published in September 2013, the “Asia-11: Illicit Tobacco Indicator 2012” surveys the illicit tobacco trade in 11 selected markets - Pakistan, Thailand, Hong Kong, Vietnam, Malaysia, Singapore, Indonesia, Brunei, the Philippines, Taiwan and Australia.

According to the report, illicit volumes were highest in Pakistan, Vietnam, and Malaysia. In 2012, in both Vietnam and Pakistan, illicit consumption was over 20 billion cigarettes. In Malaysia the volume of illicit cigarettes was estimated at almost 8 billion.

In Vietnam, total consumption (legal and illicit) is estimated at 103.3 billion cigarettes in 2012. Of this, an estimated 80 percent is legal domestic consumption, 0.6 percent is non-domestic legal consumption, and 19.4 percent is illicit consumption, according to the report.

The estimated share of illicit consumption in total consumption is based on estimates by the Vietnam Tobacco Association.

Reported seizures of illicit cigarettes by Vietnamese Customs totaled 84 million cigarettes in 2012, a similar level to 2011.

The report also says the tax revenue losses of all 11 countries from illicit consumption totaled US$3.4 billion in 2012, with the biggest tax losses in absolute terms occurring in Australia, Malaysia, Hong Kong, and Vietnam.

The study estimates the tax loss associated with illicit consumption in Vietnam for 2012 at VND6.5 trillion ($309 million).

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