Tobacco Taxes and Illicit Trade: Selected Analyses

Tobacco products face varying levels of taxation in different locations, creating opportunities and incentives for illicit trade. Cigarettes are taxed at the federal, state, and in some cases, local levels. According to industry representatives, taxes and other fees make up significant components of the final price of cigarettes, averaging 53 percent of the retail price. This book examines incentives that are important for understanding cross-border and illicit trade in tobacco products; and different schemes used to generate profits from cross-border and illicit trade in tobacco products.