Considerable Increase on Penalties Imposed on Illicit Cigarettes

Importing, supplying and consuming of contraband cigarettes drastically and negatively affect the country in various ways. During these last years, the Malta Tax and Customs Administration, notwithstanding the aggressive enforcement campaign, was also taking stock of the whole detrimental situation.

From these analysis, it clearly transpired that the actual deterrent effect on those who break the law, is quite ineffective. In fact, it is not at all discouraging to contrabandists to take the risk in supplying said cigarettes. This is consolidated due to the many repetitive cases which the Malta Tax and Customs Administration frequently encounters.

Thus, this anomalous situation in the various segments throughout the country must be dealt with in such a manner where it would address the demand side as well as the supply side. This means that Malta Tax and Customs Administration has no other alternative but to proceed in the same manner against those who import and sell, as well as those who consume these types of cigarettes.

For this reason, last year, the law pertaining to evasion of excise duty has been amended thoroughly.

The increase of such penalties is definitely not of a cosmetic nature as follows:

• Out-of-Court settlements increased from €250 to a minimum of €1,500; 
• Court penalties increased from €500 to a minimum of €3,500, up to a maximum of  €25,000, in the case of seizure, whilst In the case of evasion, this has increased from €600 to a minimum of €4,000, up to a maximum of  €25,000.

Apart from this deterrent, Customs and Police authorities will be increasing their enforcement measures by increasing their resources.

The Malta Tax and Customs Administration could have gone beyond the proposed measures, however, it was felt that currently this would suffice to send a clear message.