Romanian Ctrl Bk Head: Higher Tobacco Taxes To Fuel Black Market

Romanian central bank governor Mugur Isarescu Thursday said a new increase of the tobacco excise duty would put additional inflationary pressure and would fuel cigarette smuggling.

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"We hope we'll be able to get rid of a few inflationist burdens next year, such as the substantial contribution witnessed in 2009 and 2010 of the higher tobacco prices," Isarescu said at the presentation of the third-quarter inflation report.

Romanian cigarette black market accounted for 24.4% of the overall sales at the September this year, according to a survey from research company Novel.

Tobacco excise duties increased by EUR10 to EUR74 per 1,000 cigarettes as of January 2010, after a EUR14 increase a year-earlier.

According to a European Council directive, EU members are required to increase excise duties for tobacco to EUR90 per 1,000 cigarettes as of 2014. Romania, along other seven member states were given until January 2018 to comply with the directive.

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