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Illegal Market of Cigarettes in Estonia

Author

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  • Evelin Ahermaa

    (Estonian Institute of Economic Research)

Abstract

Tobacco products belong to a group of excise goods and an excise duty is levied on them. The latter increases the price, but there are no changes in the quality of the goods and it leads to tax frauds. There has been regular increase in the excise duties on tobacco products in Estonia; changes in tax rates have influenced legal sales, mostly of cigarettes. Consumption of cigarettes is the largest in the group of tobacco products in Estonia; therefore, the paper is especially focused on cigarettes. The purpose of the paper is to evaluate illegal market of cigarettes in Estonia, using comparison of the net of estimations. The paper introduces the method of analysis where the essential role is given to inhabitants (concerning their expert and individual opinions). Empirical evidence concerning illegal market of cigarettes in Estonia is presented by size on the example of fieldwork carried out in 2003.

Suggested Citation

  • Evelin Ahermaa, 2005. "Illegal Market of Cigarettes in Estonia," Working Papers 122, Tallinn School of Economics and Business Administration, Tallinn University of Technology.
    • Handle: RePEc:ttu:wpaper:122
    as

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    File URL: http://deepthought.ttu.ee/majandus/tekstid/TUTWPE_05_122.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    cigarettes; excise duty; illegal market; taxation;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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