Momirović: Zero tolerance towards the gray economy

More than 5 tons of illegally cut tobacco, even 3.5 tons of tobacco leaves, 26,000 packs of cigarettes, 12,000 packs of rolled cigarettes, 2 tons of hookah tobacco, and nearly 1,200 packs of snus tobacco were destroyed today in Smederevo. By seizing these tobacco products, damage to the budget of the Republic of Serbia of around 200 million dinars has been prevented, stated Minister of Trade Tomislav Momirović after the destruction of tobacco seized in the past period.

“The state must fund a large number of public services, such as education, healthcare, police, military, and all of this is primarily financed from excise duties and turnover taxes. All people who buy cigarettes without excise duties are ‘taking’ money from these public services that serve all citizens of Serbia. We are determined to put an end to all forms of the grey economy, and therefore our state will have zero tolerance towards the grey economy, especially when it comes to the trade of tobacco products,” said Minister Momirović, adding that by purchasing on the illegal market, our citizens expose themselves to health risks as products bought on the black market have not undergone the necessary controls by adequate state inspections.

The tobacco seized by the Market Inspection was turned into compost – natural organic fertilizer. In this way, from illegal tobacco products that cause significant damage both to the republic’s budget and citizens, something that has multiple benefits has been created. Composting tobacco is a method that was first applied in Serbia for the destruction of tobacco products seized on the black market and represents the most environmentally friendly way of waste disposal. During this action, 7 tons of the highest quality fertilizer suitable for organic planting were obtained.

“I would like to thank the companies British American Tobacco, Japan Tobacco International, and Philip Morris International for their cooperation, which in just the past year contributed more than one billion euros to the budget of the Republic of Serbia,” concluded Momirović. The three largest tobacco companies, which also have factories for the production of tobacco products in Serbia, actively collaborate with state authorities (especially with the Market Inspection and police) in combating illegal trade and discovering smuggling through various projects:

1. Regional project implemented by the American Chamber of Commerce (AmCham), sponsored by the tobacco industry – Innovative Approaches to Combating Illegal Trade

2. Projects of NALED (especially the Alliance for Fair Competition within NALED), involving partner state bodies and representatives of the economy Projects of the Committee for Combating Illegal Trade of the Foreign Investors Council (FIC)

3. Projects of the Committee for Combating Illegal Trade of the Foreign Investors Council (FIC)

JTI, in cooperation with the police and Phytosanitary Inspection, has developed the “Satellite” project, which enables the detection of illegal tobacco plantations using the most advanced technology. From 2017 to the present, the results have been improving year after year, indicating that illegal tobacco plantations have decreased by 99% since the start of the “Satellite” project.

A total of 858 tons of illegal tobacco plantations that would have caused damage to the budget of the Republic of Serbia have been destroyed, and excellent preventive results have been achieved in cooperation with state authorities, preventing damage to the republic’s budget of 483 million euros. In just the past year, 52.4 tons of illegally planted tobacco were destroyed.