Economic smoke screen: The Corona period led to a reduction in the smuggling phenomenon of tobacco and its products, and to a jump of NIS 90 million per month in state revenues • Estimates: A quarter of the tobacco market in Israel - the black market
More profits
Photography:
Joshua Joseph
An unhealthy way to get rich:
According to data from the Tax Authority, in the months when the corona plague is raging, the state's income from tobacco imports averages NIS 617 million per month.
This is an increase of NIS 90 million a month, compared to the period before the corona.
In other words: in the last four months there has been an average increase of 17.5% in the volume of tax collection from tobacco imports, compared to the same period last year.
Duty-free tobacco sales explain only about 7% of total tobacco sales, so it is still a huge gap, which according to activists in the field does not reflect an increase in tobacco consumption, but a very significant decrease in tobacco smuggling.
These data show that the state coffers lose about NIS 100 million a month (1.18 billion a year) that can be routinely put into the state coffers, if only there is increased enforcement on smuggling tobacco and its products, mainly cigarettes.
This was even stated in the State Comptroller's report, which was published very recently, and which stated that Israel loses revenue of billions of shekels every year due to smuggling of tobacco.
Israel is no different from other Western countries in the world in this area: the countries impose high tariffs to reduce the smoking phenomenon, and the high tariffs encourage smuggling and introduce criminal organizations and terrorist organizations around the world, which finance their activities through illegal businesses.
According to global estimates, about 10% -6% of all cigarettes are smuggled, but in Israel it is estimated that the smuggling rate is higher than 25%.
Ben Gurion Airport is not the only or main route of smuggling tobacco to Israel. In the heart of Wadi Ara, on the seam line, lies the city of Barta'a. Half the city is in the Palestinian Authority and half is in Israel. With the blue ID card and the Palestinian citizens with the orange card to manage the coexistence of the tobacco industry.
Tobacco from PA crops
In recent years, more and more agricultural areas in the PA have become tobacco growing areas during the summer months, and growers take care of the quality of the crops.
Due to customs laws the tax is only on the tobacco and not on the cases, the rolling paper or the filter.
The tobacco grown in the territories was harvested at the end of the summer, and entire villages in the territories of the PA became factories for the production and rolling of cigarettes.
The paper and filters are imported without any problem and freely.
The result - locally produced cigarettes are transported to Barta'a, and from there distributed by agents all over the country.
