Bulgaria's Customs Agency Forecasts a Drop in Profits from Cigarette Excise Taxes

The chief of Customs Agency Vanyo Tanov forecasts a drop in profits from excise taxes on tobacco products after the passage of the full ban on smoking in indoor public areas.

At the recent press conference, Tanov declared that the second half of 2012 would bring the expected BGN 100 M less in tobacco tax revenues into the state treasury under the most positive scenario. To illustrate his though, he stated that Spain is the latest EU country to pass a smoking ban in indoor public areas, had announced a 30% drop in cigarette excise tax profits a year after the restriction took effect.

“This is just logical, as this is what the action is intended at- prohibiting smoking in public areas to guarantee a lowered use of tobacco products,” he said.

Tanov added that the given step would not affect smuggling, adding that those who give preference to illicit cigarettes generally belong to social groups that do not work in offices and would still continue to light up. “I don’t think that smuggling is increasing, if judging by profits. For instance in the first five months of 2012, the Customs Agency generated about BGN 62 M more in comparison to the previous year,” he underlined.

As about the proposal of the administration in Svilengrad that the city has to host the representatives of the Customs Agency, Tanov noted that the officials had demonstrated a “quite good sense of humor.” Members of council from Svilengrad spoke against the backdrop of the government’s intentions to move the Customs Agency to Ruse and also said that the customs office in Svilengrad would probably close.

Tanov underlined at press conference that the fate of the Svilengrad customs had not been decided. He also stated that the method for the dissolution of the customs officers arrested on May had just launched. On May, 32 custom officers at Kapitan Andreevo border were detained within an operation under the name “Customs” led by the Interior Ministry.

Accusations were adduced against 7 custom offices, with 4 officers accused for taking part in an organized crime group dedicated in racketeering and the last 3 officers faced accusation for bribe-taking.