Managing the Raw Tobacco Supply Chain: Insights from Poland

At the recent Tax Stamp & Traceability Forum™, Dr Hana Ross from the World Bank Global Tax Program shared findings from a 2020 study examining Poland’s approach to regulating the raw tobacco supply chain. The study highlighted how targeted controls helped the country significantly reduce its illicit tobacco trade.

Prior to 2013, Polish excise tax applied only to cigarettes, cigars, cigarillos, and smoking tobacco. Despite being a tobacco-growing nation, Poland did not tax raw tobacco, meaning farmers and dealers could legally sell their crops to virtually any buyer.

This regulatory gap created a large price disparity between taxed smoking tobacco and untaxed cured leaf. As a result, many consumers were increasingly purchasing raw, untaxed tobacco for hand-rolled cigarettes. Estimates from the research suggest that in 2012, up to 70% of roll-your-own cigarettes were made using this untaxed material – costing the Polish government about PLN 1 billion (USD 264 million) annually in lost excise revenue.