The Portuguese government is likely to register a revenue shortfall of an estimated €74 million if it does not alter the section in the 2014 State Budget that increases the price of rolling tobacco, according to THIS – the European Association of Producers, Distributors and Importers of Tobacco.
"The Government's proposal could cause a 70% drop in sales of rolling tobacco and an increase in tobacco smuggling and counterfeiting," read today’s statement issued by the association.
At issue is an increase in price to €30 per kilo of tobacco which, according to ESTA, will result in a drop of 62% in tax revenue compared to last the previous year.
Antonio Abrunhosa, secretary general of ITGA – the International Association of Tobacco Producers, argues that the ones who will profit are those involved in smuggling, because the price increase will not make people smoke less, the loser is the state which will receive less tax."
In Spain the prices are lower and many Portuguese will stock up from over the border, or simply buy smuggled tobacco.
