UNMIK ON AIR
5th January
2004
Cigarettes in Kosovo
(By Gezim Kasapolli)
Hajdin
Beqiri: I’ve been doing this job for
three years now, I sell cigarettes on the streets and I support my family and
myself. Cigarettes are getting more expensive and we all expect prices to
become higher next month. I don’t pay any taxes and I don’t know who should I
pay taxes to. I don’t know the origin of these cigarettes since we buy them in
the market.
Hajdin Beqiri is yet
another Kosovan who sells cigarettes on the main streets of Pristina. He has no
idea about excise duties or about the origin of his cigarettes. But that is
about to change.
15th of January 2004 will see the introduction of
banderols on all packs of cigarettes imported into Kosovo. Under the new rules, the banderol is
mandatory for all cigarettes brought into Kosovo after the 30th of November and
for all products sold in shops from the 15th of January onwards.
Director of Customs John Robertson believes that the introduction
of banderols is of great importance.
John Robertson: The importance of banderols in Kosovo is that it enables
people to be sure that they are getting a genuine tax paid product and of
course tax from that product goes straight to the Kosovo Consolidated Budget.
There is another advantage for the custom service and that is we can recognize
a product that is legitimate and lawful and the opposite to that being we can
recognize what is not. So it is very helpful to us as an enforcement section in
the customs service.
Cigarette smuggling is one of the main problems that Kosovo and the
region in general are facing at the moment. The seizure of 18.6 million
cigarettes in Italy that were Kosovo bound is just another example of the
gravity of this phenomenon. Kosovo is not just a destination for smuggled
cigarettes; it is also an important transit center. And, according to
Robertson, since cigarette smuggling is likely to continue despite the new
rules, the excise tax had to be increased in order to maintain the revenue
yield for the budget.
John Robertson: the excise tax increase was implemented on the 1st of
October. It was a two stage increase from a very low base of 2 euros per 1.000
earlier this year and it was raised to 6 euros per 1.000 and then to 10 euros
and over the course of the summer and what that means is that we have to be
very careful that we don’t encourage more smuggling into Kosovo to try to avoid
a higher tax on cigarettes for domestic consumption.
Considering the number of smokers it is more than obvious that Kosovo is
a rather large market for the cigarette business. The tighter import rules will
lead to a hike in cigarette prices, but not significantly enough to have a
major impact on the number of smokers. Or on their health. Almost everyone smokes, almost everywhere -
in public places, institutions and homes. Although people are familiar with the
damages caused by smoking, they choose to ignore them. The consequences of this
are more than worrying says Dr. Ramadan Dedinja, specialist for lung
diseases.
Dr.
Ramadan Dedinja: The population is informed about the dangers of
smoking, however they ignore it. The main consequence of smoking is lung
cancer. The greatest problems that smoking causes are so-called obstructive
diseases, that is, bronchitis and obstructive bronchitis, asthma and other
chronic diseases.
If the anti-smoking
campaigns to date have had little impact, adds Dr. Dedinja, it’s because of the
lack of professionalism.
Dr. Ramadan Dedinja: There
was no real campaign for raising awareness, there were some initiatives,
however nothing concrete was done since the experts of this field were not
really consulted.
The quality of the
cigarettes in Kosovo is also a matter of concern. Since a large amount of
cigarettes enter Kosovo illegally no one can guarantee their quality. In order
to ensure that in the future Kosovans will be smoking a genuine tax paid
cigarette, UNMIK customs and police will cooperate actively on enforcement,
says customs chief Robertson.
John Robertson: There are two levels of enforcement. First level of
enforcement is mainly related to customs office to stop the goods coming in to
the territory. The second phase will be mainly by the police and the police
will be looking very closely at retail outlets and kiosks for evidence on
banderole or smuggled product in sale in the open market.
But,
this is the Balkans. A region rather “notorious” when it comes to forgery,
imitation, falsification and other so-called crafts. That is why, adds
Robertson, we chose the best company for this job in order to prevent any
possibility of counterfeiting.
John Robertson: The features that are in the banderol to prevent counterfeiting are very
sophisticated. In fact, the company that makes the banderols also make the euro
note and it is a very high quality product with a lot of anti-counterfeiting
features in it, some of them visible to the naked eye and some not visible and
only the customs at the moment has the technical expertise to detect a
counterfeit banderole.
Whether
banderols will stop smuggling is a question yet to be answered. But one thing
is for sure – cigarettes in Kosovo will be tax paid and the Consolidated Budget
of Kosovo will finally properly benefit from those taxes. And that cannot be a
bad thing!
And
that was all for this edition of UNMIK on Air. Thanks for listening.