According to the National Steering Committee Against Smuggling, Trade Fraud and Counterfeit Goods cigarettes are easy products for smugglers to avoid excise tax, VAT and import duties, allowing them to earn up to 350% profits, putting them only behind narcotic smugglers in terms of profitability.
Smuggled cigarettes account for nearly 20% of market share and cause losses of VND10trn to the state budget annually. Research by the Tobacco Economic Technical Institute in 2015 showed that 80-90% of the smuggled cigarettes were Jet and Hero brands.
Inspecting smuggled cigarettes
In the first six months, 3,195,150 packs of cigarettes were seized and destroyed, an increase of 2.2% on previous year. However, the authorities said this was a small amount of that being traded.
On June 20, the National Assembly approved of the revised Penal Code, stating that cigarette smugglers may face one to ten years of imprisonment for transporting 1,500 to 3,000 packs of cigarettes, five to ten years of imprisonment for 3,000 to 4,500 packs and 15 years of imprisonment for over 4,500 packs.
Prime Minister Nguyen Xuan Phuc asked the Ministry of Finance to direct units to tighten inspections and strictly deal with violators involved in trade frauds and especially cigarette smuggling. State agencies are also asked to raise awareness about the dangers of cigarettes among residents in border areas.
