Tobacco smuggling gobbles up sales tax revenue
That tobacco products are being smuggled into the country, evading the 100 percent sales tax, is evident from the decrease in sales tax revenue collected at the regional customs office in Phuentsholing. As the busiest border town, most tobacco products enter the country through Phuentsholing. There is no dearth of tobacco products, especially cigarettes and chewing tobacco, but the regional revenue and customs office collected only Nu 234,502 in sales tax in 2013. The year before, they collected Nu 275,506. Incidents of tobacco confiscation, however, have increased in 2013, going by police records.