Cigarette smuggling has intensified in Romania since the increase in excise tax in 2006 and the resulting price rise, the Adevarul daily reported on Tuesday.

Smuggled cigarettes, on which no tax is paid, now account for between 10 and 15 percent of cigarettes sold in Romania and costs the government tens of millions of euros in lost revenue, according to cigarette producers basd in Romania.

"Cigarette smuggling doubled in 2006 in comparison with 2005. The connection is obvious: as long as excises and prices go up, smuggling will follow the same trend," said Gilda Lazar, corporate affairs director at Japan Tobacco International.

Adrian Popa, corporate affairs manager at British American Tobacco in Romania, said he believed the uncollected excises and value-added or sale tax (VAT) cost the state some 240 million euros (312 million U.S. dollars).

According to a study released by the company, cigarette smuggling in Romania increased from 9.5 percent in 2005 to 15.1 percent in 2006.

It also showed that 43.3 percent of tax-dodging cigarettes were traded last year with Ukraine, the Republic of Moldova and Serbia and duty-free that stores serve as the main source of the counterfeit tobacco products.

Researchers found about 75 percent of smuggled cigarettes are bought from peddlers in markets and on the street. They also found the illegal trade is also flourishing in kiosks, stores and supermarkets.

More than 35 billion cigarettes are sold in Romania and the total value of the market stands at approximately 1.4 billion euros (1.82 billion dollars).

Source: Xinhua