07 february

Amendments to tobacco law may cause serious losses for state budget

The Moldovan Government has approved a package of the so-called anti-tobacco laws and regulatory acts, and sent it over to parliament for consideration on Wednesday. The governmental press service told Infotag that the documents were approved by the Government yet on December 17, 2013.

According to the press service, the package presupposes prohibition of smocking in closed and semi-closed public premises, at work places and in the public transport, as well as sanctions against the managers of such no-smoking premises as well as against smokers.

In its final shape, the package stipulates that kiosks selling cigarettes must be situated minimum 200 meters from one another and 50 meters away from educational and health institutions. The selling of cigarettes and other nicotine-containing products shall not be permitted from 10pm to 8am.

However, many experts regard the proposed amendments to the Law on Tobacco and Tobacco Products and to the Code of Administrative Offences as imperfect ones. As wrote the Komsomolskaya Pravda Moldova newspaper, “the amendments may well lead to considerable losses of the State Budget”.

“If the lawmakers disregard a number of important factors at considering the bills, then one-third of the Moldovan tobacco market may go into shade. One should bear in mind that the legal tobacco business brought nearly a billion lei of income to the country’s State Budget in 2013, and in 2014 its share will estimatedly constitute 5-6% of Budget revenues. But if the proposed amendments are adopted in their initial shape, then Budget revenues from the tobacco sector will shrink by more than 30%”, said the newspaper article.

Its authors admit, however, that the bills have positive aspects, too, for instance the restriction on smoking in public places or in children’s presence, as well as the proposition to apply sanctions against economic operators selling cigarettes to persons under age.

“With all this, one should not disregard some disputable and even risky questions. In Moldova, smokers constitute nearly 51% of men and 22% of the whole adult population. Certainly, with this law in place, these people will not drop smoking, but may start seeking illicit products – counterfeit and smuggled cigarettes. The kinds of cigarettes that are proposed to be prohibited (those containing the aroma of mint, vanillin, caffeine and other additives) constitute nearly one-third of the domestic market. If the said law is in place, such cigarettes will not vanish from the market, but will be simply replaced with same illegal ones”, wrote the newspaper.

The publication maintains that the lawmakers should bear in mind the ‘Transnistrian factor’ – the presence of the Transnistrian segment of the Moldo-Ukrainian border that escapes the official Chisinau’s control.

“Presently, there are quite many companies in the Transnistrian region that import and/or produce cigarettes. Then follows a simple arithmetic: one-third of the legal tobacco market, which will become empty due to the law in question, will be flooded with dubious-origin produce. So, Moldova, a source of contraband cigarettes presently, will then become an importer of contraband cigarettes”, wrote the paper.

The article further said, “At passing the said draft law, one has no be sure that the document will not favor indirectly the trade in counterfeit cigarettes. This is exactly what the republic may receive from its projected ban on placing advertisements of ‘legal cigarettes’ at places where they are sold (shops, kiosks) and on exhibiting cigarettes in their sale places. In fact, all this will only legitimize the practice of selling cigarettes from under the counter. The ban on advertising cigarettes in their sale places is depriving consumers of the possibility to learn information about legal products. Actually, all this does not mean advertising in the press or in streets, but only at places visited by smokers”.

Its authors regard as disputable also the demand that the warning inscription about the hazard of smoking must occupy minimum 75% of the package surface.

“The bill thus restricts the smoker’s right to receive true information about the quality of the product, and creates favorable conditions for trade in counterfeit produce. In fact, the bill prohibits the cigarette brand, which is itself an element of security and a guarantee that the smoker is not buying a counterfeit product that may be dangerous to the human health”, wrote the newspaper.

Its authors regard as “strange” and “radical” the idea concerning the 75% size of the warning inscription, because totally different norms are used in the European Union.

“In the European Union, the warnings must occupy 30% surface of the package’s front side and 40% of the back side. In the neighbor Ukraine – 50% of both front and rear sides, in Russia – 30% and 50%, respectively”, said the article.

“From its very beginning, the idea of this bill was good, but later on, by accident or device, it was distorted due to excessive zeal or ignoring of important details”, wrote the Komsomolskaya Pravda Moldova author.