Laws, anti-smuggling measures boost DIN, DIV value

Confiscated cigarettes (file photo)

Belgrade, Aug 5, 2003 - By radically reducing the level of cigarette smuggling, introducing a legal and institutional framework and establishing efficient company management, the value of tobacco companies DIN and DIV rose significantly their sell-off attracting an offer of €605 million from leading world companies Philip Morris and British American Tobacco.

According to data of the Serbian Ministry of Finance and Economy, cigarette smuggling dropped from 50 to 20 percent from 2000 to 2002, which means that Serbia's budget received an additional €150 million annually.

In May 2002, as part of an action toward prevention of cigarette smuggling, the Serbian government issued an order that confiscated cigarettes be exterminated. Since then, 247 tonnes of cigarettes have been destroyed. According to the data of the Ministry of Finance and Economy, the payment of tobacco excises in the first half of this year rose by 48.2 percent compared to the same period last year.

As for the legislation, the first phase of the tax reform simplified the excise system, universal amounts of excises were defined, and the procedure of issuing excise stamps was transferred to the Ministry of Finance and Economy. A Tobacco Law was adopted to regulate production and procession as well as wholesale and retail trade of tobacco products. By adopting the Law on changes and amendments of the Law on Excises, a new excise policy set for 2005 to 2010 was established, with the aim of protecting domestic tobacco production and stimulating foreign producers to locate the production of international cigarette brands in Serbia.