Smuggled tobacco products seized in An Giang Province. Top priority should be given to controlling the trade and transportation of smuggled tobacco products in the local market. — VNS File Photo

Nguyen Trong Tin, the deputy director of the Market Management Department under MOIT, said on Wednesday at an online meeting on market management that the trading and transportation of smuggled tobacco products in the country is a complicated process.

He added that such practices are common mainly in the border provinces located in southern and central Viet Nam, including Quang Tri, Long An, An Giang, as well as Dong Thap, Kien Giang and Tay Ninh.

Trade Minister Vu Huy Hoang.

It is from these provinces that smuggled tobacco products are transported to markets in HCM City and other large cities nationwide, he pointed out.

The hotbed for tobacco product smuggling is in the border areas of the Long An Province, while Ha Noi and HCM City are the largest markets for trading smuggled tobacco products, Tin noted.

The smuggling of tobacco has grown due to the availability of cheaper tobacco at VND3,500 to 12,000 per pack, compared with the more expensive local tobacco products.

This is because the smuggled tobacco products' cost does not take into account the special consumption tax of 65 per cent and a value-added tax of 10 per cent borne by local tobacco products.

Therefore, the Government had issued a directive in September 2014 to fight the growing incidence of such smuggling.

Since the directive was issued, the department has seized 873,399 packs of tobacco; accounting for 43.67 per cent of the total packs seized in all of 2014 and collected VND10.2 billion (US$481,100) from fines imposed in smuggling cases.

Peter Henriques, director of British American Tobacco.

Minister Vu Huy Hoang said the fight against the illegal trading and transportation of smuggled tobacco this year is expected to encounter further challenges, due to which the department is promoting certain activities to fight against the smuggling of tobacco products.

The department also needs to forge closer ties with relevant offices, such as border military, taxation, sea police and customs at the central to provincial/city level to fight tobacco smuggling activities this year, Hoang said.

The smuggling of tobacco will increase further and has to be jointly dealt by the market and society, he suggested.

Tin said market forces in cities and provinces that trade in large volumes of smuggled tobacco products, including Ha Noi, HCM City, Da Nang, along with Can Tho and Hai Phong, will monitor enterprises, business households, tobacco shops and services for the sale of any smuggled tobacco products.

Vu Van Cuong, chairman of the Viet Nam Tobacco Association, said the smuggling of tobacco is highly profitable as Viet Nam has implemented strict regulations for made-in-Viet Nam tobacco production, which has indirectly created conditions that are conducive to the growth of smuggling activities.

Vu Van Cuong, chairman of the Viet Nam Tobacco Association.

The smuggled tobacco volume accounts for 30 per cent of the local tobacco market and resulted in a 20 per cent reduction in the consumption of domestic tobacco products, Cuong pointed out.

According to a government circular dated December 7, 2012, persons found transporting 1,500 packs of smuggled tobacco are liable for criminal prosecution, he said. Therefore, smugglers only transport fewer than 1,500 packs to avoid criminal prosecution.

As a result, the association has proposed that the state should decrease the number of packs of illegally imported tobacco as the basis for criminal prosecution from 1,500 to 500, he said.

Meanwhile, Peter Henriques, director of British American Tobacco, appreciated the directive issued by the government to discourage tobacco smuggling.

He expects State offices to actively fight against tobacco smuggling in order to curb smuggling and help control tax evasion and budget losses. — VNS