Illegal trade undercut

| October 24, 2017

A recent study by KPMG has found that one eighth of the cigarettes consumed in Morocco last year were illegally traded, according to a story in The Morocco World News.

Smuggled cigarettes enter Morocco from its neighbors, Algeria and Mauritania, with Algeria accounting for 65 percent of the inflow even though the border with Algeria has been officially closed since 1994.

A pack of Marlboro cigarettes sells in Morocco for US$3.38, while a pack smuggled from Algeria sells for US$1.91 and a pack smuggled from Mauritania sells for US$1.35.

The KMPG study found that one of the reasons for the relatively high level of illicit cigarette consumption in Morocco is that cigarettes – 38 percent of them – are sold as single cigarettes.

It is estimated that if consumers smoked licit rather than illicit cigarettes, the government would benefit from additional tax revenue of about US$143 million a year.

Morocco has had some success in reducing the illegal trade through increasing law-enforcement and border-security activities.

And the introduction in 2015 of lower-priced brands that sell for the same price as illicit products has aided the decline of the illegal trade. In fact, sales of licit cigarettes increased by eight percent in 2016.

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Category: Breaking News, Illicit trade, Markets, People, Tax

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