Is It Always Profitable to Be a Member of the EU? – Part II – on the Purchasing Power Inequality of a Box of Cigarettes and Budget Losses from Smuggling

International Conference on Economic Chalenges: Migration, Globalisation, Sustainability, Policies October 21–22nd, 2016, Unwe, Sofia, Bulgaria

4 Pages Posted: 22 Jul 2019

See all articles by Bancho Banov

Bancho Banov

Saint Clement of Ohrid University of Sofia

Date Written: october 21, 2016

Abstract

Summary: Britain's EU referendum or so-called Brexit questioned whether it is always beneficial for an EU member to join the EU. This article is the second of a few on the issue of some losses a member of the EU has suffered because of its membership. The first part concerns the bankruptcy of a large bank in Bulgaria - Corporate Commercial Bank in 2014, and why because of the high EU deposit guarantee threshold the guarantee fund was emptied and the state had to grant a loan to the fund of 1.5 (1.6) billion BGN, which is likely to be simplified and paid by taxpayers. This second part of the series deals with the losses that Bulgaria suffers because of another requirement of the EU - to increase the excise duty on cigarettes in Bulgaria, which from 23 BGN on 1000 pieces it reaches 155 BGN on 1000 pieces. Losses are not late - in Bulgaria 6 billion cigarettes are smoked less. Smuggling is increasing and, according to some sources, Bulgaria is losing 1.5-2% of its total tax revenue from this smuggling - 10 times more than Germany and 16 times more than the Netherlands.

Keywords: Brexit, UK exit from the EU, Losses of EU membership, Excise on cigarettes in the EU, Smuggling of cigarettes in Bulgaria

JEL Classification: G18, G21, G33, H77

Suggested Citation

Banov, Bancho, Is It Always Profitable to Be a Member of the EU? – Part II – on the Purchasing Power Inequality of a Box of Cigarettes and Budget Losses from Smuggling (october 21, 2016). International Conference on Economic Chalenges: Migration, Globalisation, Sustainability, Policies October 21–22nd, 2016, Unwe, Sofia, Bulgaria. Available at SSRN: https://ssrn.com/abstract=3423083 or http://dx.doi.org/10.2139/ssrn.3423083

Bancho Banov (Contact Author)

Saint Clement of Ohrid University of Sofia ( email )

125, Blvd Tsarigradsko Shosse, Block 3
Faculty of Economics and Business Administration
1113

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