KATHMANDU, JULY 21: A large quantity of foreign cigarettes was seized at the dry port of Birgunj in a container coming from Dubai via India. More than 5.8 million cigarettes of the Gudang Garam and Mond Variance brands were found in the container which was supposed to contain Moong Dal. Gudang Garam cigarettes are widely available in the market, but this is the first time when the police have seized such cigarettes being smuggled into the country through the customs.

After the tax on cigarettes was increased in Nepal by two to four times in the last five years, cigarettes have become expensive and it is more profitable to smuggle them into the country. Businessmen allege that the smuggling of cigarettes has increased rapidly in recent times. Taxes equivalent to 55 to 70 percent of the total sales price are levied on cigarettes produced and sold in Nepal, while the government has been collecting various other taxes such as health risk tax, customs, and excise duty stickers on cigarettes.

International brands are illegally smuggled from third countries into Nepal in cities like Kathmandu and Pokhara, and fake cigarettes of Nepali brands are illegally traded across the border. In the border areas, the most sold cigarettes of Nepal, including Khukuri, Shikhar, etc., are manufactured illegally in India and smuggled into Nepal and sold at cheap prices, according to the businessmen concerned.

Last year, on the application of Surya Nepal Pvt Ltd, action was also taken against a company producing fake cigarettes in Muzaffarpur, India. In spite of all these, smuggling has not been controlled as there are many tax evasion products and huge profits are made by tax evasion. Statistics show that the state is losing around Rs 9.5 billion in revenue in a year due to smuggling and illegal trade of illegal cigarettes, khaini, gutkha and other tobacco products in Nepal. 

 
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