An increase in cigarette smuggling levels experienced the Central American region in 2024, as well as the implementation of new forms of trade in this product.
The report indicates that Panama, Costa Rica, Honduras, Guatemala and El Salvador have great challenges for cigarette smuggling, which is calculated in an average close to 50%, according to the coordination of the Licy Pro-Committee Committee assigned to the Federation of Chambers of Industry of Central America and the Dominican Republic (FECAICA).
National situation
In Guatemala, the Commission for the Defense of Formal Trade (CODECOF), attached to the Guatemalan Chamber of Industry (CIG), realizes that smuggling increased 24.7%, according to a study conducted by the TRN firm.
Muriel Ramírez, coordinator of the aforementioned committee, said that, in the case of Guatemala, “if other forms of possible tax fraud are considered, the figure could amount to 50%, referring to schemes that, although they appear to be legal, are used to evade the full payment of taxes.”
This fraud scheme is known as technical smuggling.
Broken down by countries
The document that makes a count in the region warns that, in Panama, “the situation is especially critical, since smuggling covers more than 90% of the market.”
On the other hand, advances in El Salvador are recognized in the fight against illicit trade to this product, since a study conducted by the total signature Research Network (TRN) in the third quarter of 2024 indicates that the number of illegal brands identified in that country decreased from 15 in 2023 to 10, so it shows significant progress in this area.
“In the case of Guatemala,” if other forms of possible tax fraud are considered, the figure could amount to 50%, referring to schemes that appear to be legal “
Muriel Ramírez, Codecof Coordinator
Ramírez declared that El Salvador remains at the lowest levels of illicit cigarette trade compared to other years, and in 2024 the result was 32.7%. “We know that the government – Central – is committed to maintaining the frontal fight against this scourge,” he said.
The executive recalled that El Salvador had 5% more illicit trade of cigarettes three years ago, and when fighting this scourge you are figures will continue to decrease, and for the treasury they can raise more income.
The document emphasizes that it was possible to show rising figures for Costa Rica, Honduras and Guatemala.
For Costa Rica, the TRN study indicates that 46.7% is the amount of illegal cigarettes that circulate in the market in the second quarter of 2024, while 39.1% were accounted for in the same period of 2022.
In the case of Honduras and Guatemala, Ramírez added, this crime that causes millionaire losses for non -charged taxes has not been overcome, impacts industries, and put public health and citizen security at risk, being related businesses related to organized crime.
For Honduras, data from the National Association of Industrialists (ANDI) reported that cigarette smuggling reaches 43%.
Discussion of new tax rates
The dates indicates that there are intentions of the countries in increasing tax rates for Costa Rica and Guatemala, although it was not required who intention is, because in the Congress of the Republic the blocks do not have something planned in that regard.
“An this nature can lead to greater smuggling of cigarettes, being products that do not pay taxes.
Ramírez concluded: “From the Pro-Comercio Lice committee we urge the authorities of the countries of the region to take more forceful measures against smuggling and avoid measures such as raising taxes, which not only affect the formal industry, but also strengthen criminal networks behind illicit trade.”
Seized 2024
Seized figures from January to December 2024, according to the report of the Interinstitutional Commission against smuggling and customs fraud (coincon):
- Measures and adjustments paid in customs: Q438.2 million
- Customs value of confiscated goods: Q95.3 million