Modernization of tool for collecting and comparing of shadow economy spatial data

ended

The main purpose of the project is to ensure the protection of the EU's financial interests by modernizing a tool for collecting and comparing of shadow economy spatial data. Lithuania is in an exceptional geo-economic location. The country has the external European Union border with Belarus and Russia, where retail prices of cigarettes are up to five times lower than in Lithuania and up to 20 times lower than in some other European countries. Moreover, tobacco factories which actively supply cigarettes to the black market are located nearby (in Grodno, which is just 40km from the Lithuanian border, and Kaliningrad which is about 120km from the Lithuanian border). The illicit cigarette trade robs governments of tax revenue and increases tobacco-related deaths. Cigarettes are a particularly attractive product to smugglers because tax is a high proportion of price, and evading tax by diverting tobacco products into the illicit market (where sales are largely tax free) generates a considerable profit margin for the smugglers. Lithuanian customs works in close cooperation with other law enforcement institutions of Lithuania and other EU countries. Implementation of this project will improve cross-border cooperation enabling the exchange of information to strengthen the fight against irregularities and suspected fraud. The aim of the Project is to modernise the analytical tools in order to enable to analyse the spatial data on offences related to the shadow economy, to improve the collection and comparability of statistics on the scale of the shadow economy at the national and EU level, and to improve the transfer of the data to the competent institutions of the Republic of Lithuania and the European Union.