Political Economy of Tobacco Control (NIH)

THAILAND Executive Summary

Empirical Analysis of Cigarette Tax Avoidance in THAILAND

Analysis of tax, trade, and consumption data show that increased taxes on manufactured cigarettes are not correlated with increased smuggling. Illicit consumption of manufactured cigarettes in 2005 accounted for 10% of overall consumption for that year.
The Thai government lost approximately 4.5 billion baht per year over the last ten years due to illicitly consumed cigarettes. The Thai government should raise the cap on excise taxes, implement taxes on roll your-own cigarettes, and implement measures to reduce illicit smuggling and corruption.

INDONESIA Executive Summary

Estimates of Illicit Cigarette Consumption in INDONESIA

An Analysis of Trade and Consumption Data report shows  indicate that cigarette consumption is increasing in Indonesia, with illicit consumption estimated at approximately 12% of overall consumption for the years 2002-2004. Illicit consumption resulted in government revenue losses of approximately one trillion Rp per year during those years. The government should increase cigarette taxes in order to curb rising rates of cigarette consumption and to increase government revenue, and should enforce anti smuggling laws to curb illicit consumption and protect government revenue.

Summary of Illicit Cigarettes in Indonesia” June 2011

Report found that illegal domestic cigarettes and net smuggling together amounted to at least 23-31 billion sticks per year or 10-14% of cigarette consumption The revenue loss ranged between Rp 2.7 Trillion and Rp 3.5 trillion {US $ 327-409 Million} in 2002-2004, representing between 9% and 13% of tobacco excise revenue. If there was under reporting of consumption in the surveys, this illicit trade and revenue loss could be considerably underestimated.