Global experience of tobacco raw material traceability as a tool for reducing the shadow tobacco market and increasing budget revenues

Abstract

The aggravation of the problems of illegal trade in tobacco products highlights the need to improve measures to combat this dangerous phenomenon. The purpose of the article is to analyze global experience in controlling the movement of tobacco as a tool for combating the illegal cigarette market, the application of which contributes to the de-shadowing of the sector and increased tax revenues. The following methods were used in the study: abstract-logical, syste=matization, comparative analysis, expert assessments. Results. It is established that EU institutions have identified the revision of approaches to tobacco turnover control as an integral component of strengthening countermeasures against illicit trade in tobacco products. To restrict illegal market operators’ access to tobacco raw materials, the European Commission proposed, at the EU level, the introduction of a minimum zero excise duty rate on such products and their inclusion in the Excise Movement and Control System (EMCS). Until a corresponding pan-European decision is adopted, EU Member States may apply national control mechanisms. In particular, Poland has successfully implemented monitoring of road and rail transport through a GPS-based system for tracking the movement of so-called “sensitive” goods, which include dried tobacco. Mandatory registration and real-time monitoring of such shipments are applied to both international and domestic transport. In Canada, an initiative was proposed to introduce a more sophisticated control system – tracking the turnover of tobacco raw materials using unique identifiers; however, this approach has not been implemented in practice. Conclusions. Clear legislative regulation of GPS monitoring of dried tobacco transport, combined with effective enforcement of the relevant rules in Poland, constitutes one of the key prerequisites for the country’s success in counteracting the illegal cigarette market. This experience may be useful for Ukraine in ensuring the de-shadowing of the tobacco sector and increasing budget revenues until EU-level control mechanisms in this area are introduced.