Tobacco Tax Evasion in Bosnia and Herzegovina (2025)

This Policy Brief was written by University of Banja Luka (UBL) in Bosnia and Herzegovina. The policy brief analyzes trends in the illicit market using data from a 2019 and 2025 household survey. The researchers find that smoking prevalence increased to 43% in 2025, while illicit trade decreased from 32.3% in 2019 to 8.4% in 2025. Specifically for manufactured cigarettes (MC), which make up 91% of total tobacco consumption, the size of the illicit market declined from 18.1% to 7.3%. Hand-rolled/cut tobacco (HR) consumption, on the other hand, makes up 2.2% of total consumption, and the illicit share declined from 95.4% to 81.6%. Heated tobacco products (HTP) account for 6.7% of the total market, and are mainly legal. The survey found that heavy smokers, older people, women, and those living in larger households are more likely to consume illicit tobacco products. Illicit trade is also more common in the Brčko District and in municipalities near the Serbian border. 6.3% of MC cigarette smokers and 73.4% of HR cigarette smokers purchased these products at illegal points of sale such as the street or open-air markets. The policy brief concludes with recommendations for policy makers to continue to strengthen tobacco control to reduce illicit trade, in addition to raising excise taxes to decrease consumption.

A corresponding Working Paper can be found here.