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High alcohol, cigarette taxes in Turkey promote smuggling, fraud

ANKARA - Anatolia News Agency | 5/5/2011 12:00:00 AM |

Smuggling and fraud involving alcoholic drinks and cigarettes is growing rapidly in Turkey, recent inspections by the country's Revenues Administration have revealed.

Smuggling and fraud involving alcoholic drinks and cigarettes is growing rapidly in Turkey, recent inspections by the country’s Revenues Administration have revealed.

The number of cigarettes without a tax label has doubled in one year, hurting tax revenues, the official data gathered by the Anatolia news agency showed.

The Revenues Administration found 448,092 packages of unlabeled cigarettes in 2009, most of which were smuggled from abroad. This figure increased to 959,486 in 2010.

Unlabeled alcoholic drinks also increased by 63 percent in the same period. The officials found 23,459 bottles of unlabeled drinks in 2009 while the figure rose to 38,219 in 2010.

Fake tax labels on drinks also boomed, increasing to 14,012 in 2010 from 1,062 in 2009.

The number of people charged on alcohol or cigarette smuggling or fraud did not increase significantly, however, nor did the amount of fines issued for such incidents.

Some 597 people in 2009 and 616 people in 2010 were charged in connection with unlabeled, fake labeled or otherwise improper products.

The fines for fraud in this area totaled 4.625 million Turkish Liras in 2009 and 4.053 million liras in 2010.

The number of inspected points almost doubled, reaching 279,999 in 2010 from 197,544 a year earlier, playing a role in increased number of frauds that surfaced. The rise in the Special Consumption Tax, or SCT, on cigarettes has also contributed to the rise of cigarette-related smuggling and fraud.

Officials told Anatolia that Turkey was receiving a high amount of drug smuggling from neighboring countries, which they said was also affecting the state’s SCT revenues negatively.

The officials were expecting to collect 16.404 billion liras in SCT taxes on tobacco products in 2010 but the year’s total ended up at 14.784 billion liras, figures showed.

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