Smuggled cigarettes make Georgia blue in the face
Dec 17, 2006, 17:13
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Smuggling remains a serious obstacle for the sustainability and development of the Georgian economy. The problem can be traced to the separatist regions of Abkhazia and South Ossetia. Despite measures taken by the administration since the Rose Revolution, cigarette smuggling is remains a thorn in its side. Though the cigarette smuggling centre is South Ossetia, some cigarettes are still smuggled into Zugdidi across the Enguri River from breakaway Abkhazia. Analysts calculate that the state should be collecting GEL 292 million in taxes from cigarette purchases-GEL 213 million from imported cigarettes and GEL 79 million from domestic cigarettes. According to the Ministry of Finance, Georgia received GEL 51.9 million from taxes on domestic cigarettes and GEL 35.5 million from imported cigarettes-just GEL 88 million for the first ten months of 2006. Tobacco producers in Georgia are stating that although smuggled cigarettes are on the decline, the scale of smuggling is so large that the decrease is insignificant. Analysts estimate that around 60 percent of the tobacco business is illegal. The lack of central government control in South Ossetia makes it very easy to smuggle small amounts of cigarettes into the rest of Georgia.
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