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• Georgikopoulos, Nikolaos I.
• Pinedo, M.

The aim of this paper is to determine the extent of the illicit tobacco trade in Greece that has considerably increased during the period in which the Greek economy faced the peak of its recession (2012). In this paper, the size of illicit tobacco trade has been estimated using the difference between the registered and/or estimated tobacco consumption and the recorded tobacco legal sales. According to the results the estimated Duty Not Paid consumption as a percentage of Factory Manufactured Cigarettes total consumption has increased considerably in recent years, from 10.9% in 2010, to 14.9% in 2011 and 17.2% in 2012. Moreover, the price elasticity of factory manufactured cigarettes in Greece is also calculated, indicating an increase in tobacco price elasticity. Finally, the paper sheds light into tobacco pricing and taxation issues. The findings of the paper have important policy implications for public finances and the domestic economy.

• Economics and Business

• Economics

illicit tobacco trade, taxation, price elasticity, public revenues

JEL Classification: M21, H26, H21, The authors would like to thank the research team of KEPE which contributed to a project titled: the illicit tobacco in Greece, and especially: Dr Georgia Skintzi, Dr Athanasios Chymis, Dr Fotini Economou and Dr Ersi Athanasiou.

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