Black market in Estonia in continued decline

A drop in consumption of bootleg cigarettes and alcohol is continuing in Estonia.

According to data released by the Institute of Economic Research, 32 percent of smokers in 2012 bought contraband cigarettes, but that number dropped to 21 percent last year.

Illegal vodka’s market share has also dropped, to 20-23 percent in 2013, from 25 percent two years previously.

The percentage of the work force receiving pay under the table, meaning they pay little or no tax, also dropped, but only by 1 percentage point to 11 percent. The percentage of employees who received untaxed pay and also took home their entire pay untaxed stood at 19 percent.

The head of the institute, Marje Josing, said the decline of the black market comes on the account of those who only bought illegal goods some of the time. A fifth of the population still buys all of its cigarettes and or alcohol from illegal merchants.

Kaupo Reede or the Ministry of Economic Affairs, said the black market is cyclical – when the economy is growing and people have more money they tend to buy legal goods, and revert to cheaper alternatives when the economy is in trouble.

Source: ERR via Estonian Review

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