Tobacco smuggling costs Yemen $38.5 million a year (fwd)

[Robert Weissman <rob@essential.org>]

Tobacco smuggling costs Yemen $38.5 million a year
04:23 a.m. Jul 20, 1999 Eastern

SANAA, July 20 (Reuters) - Tobacco sumggling in Yemen is costing the
impoverished Arab country an estimated five billion rials ($38.5 million)
a year, a newspaper said on Tuesday.

The Yemeni government was losing around 756 million rials in consumption
tax revenue and the customs sector was losing 250 million rials in customs
duties on the import of tobacco products, the Saudi-owned London-based
Asharq al-Awsat daily said.

The large influx of smuggled tobacco caused local company sales to fall by
20-28 percent last year, the newspaper said.

It quoted an official at the National Tobacco and Matches Company as
saying his company had lost two billion rials in sales from 1994 to 1998.

Locally produced cigarettes could not compete because higher customs
duties and consumption taxes had increased the cost of production, the
newspaper said. Smuggled cigarettes are sold at half the price of local
brands.

Yemen, at the southern tip of the Arabian peninsula, has a population of
about 16 million people. Oil is its main revenue earner.

($1-130 rials)