Consumption taxes on tobacco and alcohol costing the state

Higher taxes on alcohol and tobacco have led to reduced state revenues and illegal smuggling.

The imposition of the special consumption tax (EFKOP) has prompted consumers to switch to alcohol sold in bulk, which is not taxed.

This, in turn, has led a 3.5 percent drop in state revenues in 2015 compared to 2014.

According to industry figures, sales of alcoholic beverages have dropped 50 percent in the period from 2008 to 2015. The imposition of the tax on wine since January this year has also led consumers to drink wine purchased in bulk.

Meanwhile, the imposition of a special consumption tax on tobacco has caused a spike in illegal trading – one in every five cigarette packs sold in Greece is illegal. In 2015, 634 million cigarettes were confiscated with state revenue losses at 75 million euros.