Economic expert Veaceslav Ioniță of IDIS “Viitorul” believes that the authorities should rebalance the fiscal policies affecting the cigarette market. He made this statement during the Contrasens program on Ziua, reports TRIBUNA, citing ziua.md.

According to Ioniță, the cigarette market is one of the most important fiscal sectors of Moldova’s economy, both in terms of the revenue it generates and its economic impact on several related industries.

“The cigarette market in the Republic of Moldova is worth approximately 8 billion lei annually. Of this amount, around 6.5 billion lei consists of excise duties and other taxes collected by the state budget, while the actual value of the products themselves is approximately 1.5 billion lei,” Ioniță said.

According to the expert, the very high share of taxes in the final retail price of a pack of cigarettes creates favorable conditions for the growth of the illegal market and cigarette smuggling, which currently originates predominantly from Ukraine.

“If around 80% of the price of a pack consists of taxes, smugglers can sell cheaper products and earn very large profits, while the state loses tax revenue and control over product quality and distribution, including sales to minors,” Veaceslav Ioniță stated.

In this context, the expert believes that the fiscal policy applied to tobacco products should be reviewed. Specifically, he referred to the need to reconsider the successive increases in excise duties, modify the tax structure, and revise legislative changes concerning tobacco control, which he argues have reduced the competitiveness of domestic producers and favored imports.