By Roger Bate -
“As authorities around the world have increased taxes on tobacco products in order to reduce smoking, illicit (untaxed) tobacco use has increased. Organized criminals have moved from smuggling brands into making their own products, known as illicit whites. They make them legally in jurisdictions like Dubai or Paraguay and then smuggle them into markets where they have paid no tax, and may not contain any of the important warning labels. Some of the criminal groups behind illicit tobacco are implicated in terror financing as well.
“We conducted a variety of empirical studies on availability of illicit whites, the legality of discarded packs, and smoker attitudes toward illicit products. We found that tax rates drive the illicit market, that smokers are annoyed by high taxes, and a minority are happy to buy illicit products.” [American Enterprise Institute]
