Legal Steps to Secure the Tobacco Supply Chain: A Case Study of Poland

The threat of tobacco tax evasion and avoidance is the most commonly mentioned argument against tax hikes. Increasingly, the focus of legislators is on leaks in the tobacco crop supply chain, in which raw or cured tobacco that was never taxed finds its way to smokers. To study the process undertaken by Poland to secure the tobacco supply chain, we analyzed the 2013-2018 legislation around tobacco supply and interviewed a key stakeholder in the Government of Poland. We found that farmers and intermediary entities can trade tobacco only if registered with the government. Farmers are required to report the size of their fields and the weight of their crops to the state authorities. Each purchase within the supply chain is also reported by both the seller and the buyer for cross-validation. This has prevented manipulation within the system, while the mere threat of heavy fines related to an excise tax law violation and/or the administrative burden associated with becoming an excise tax payer (had the violation been prosecuted) has significantly contributed to securing the tobacco supply chain. The experience of Poland demonstrates that securing the tobacco supply chain is complicated but also a tractable problem. This case can be widely applicable to other countries.