Counterfeiting and piracy harm society in many ways that are not easily understood. For example, those producing counterfeit and pirated goods never pay tax on their goods when importing or when selling them, this deteriorates the tax revenues of the country where the goods are being sold. The decline in sales of the genuine, taxable product also compounds the problem causing the government to lose out doubly.

This page is a special summary of cases that reveal where counterfeiting and piracy have caused a deterioration in the tax base. Each reference has been extracted directly from a story archived in the BASCAP Case Study Database. For further research, the full article can be found by clicking on the associated endnote.

Georgia acts on cigarette tax stamp counterfeiting - 1 March 2008

• The move follows concerns that Georgia is losing over $20 million annually from cigarette smuggling and tax evasion, and that fake cigarettes fund terrorism; 761

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Perilous Pesticides - 1 February 2008

• In February last year, a counterfeit herbicide used in Italy was found to contain quantities of a potentially dangerous insecticide. In 2004, hundreds of hectares of wheat were wiped out in France, Italy and Spain because of a fake herbicide; 752

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Counterfeit safety parts endanger Indian drivers - 11 December 2007

• The report estimates that counterfeit car parts may account for as much as 45% of the entire Indian industry; 738

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East Africa counterfeiting may lead to major job losses – Kenya, 1 November 2007

• Kenya’s largest manufacturing firms claimed it may soon be forced to lay off up to half of its employees in the face of massive counterfeiting of its products in Uganda and Tanzania; 669.

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Counterfeiting costs East Africa $20 million in lost taxes – Kenya, 18 October 2007

• ...revelations that intellectual property infringement is costing their combined economies as much as $20 million in lost tax revenue; 731

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Counterfeiters crippling Nigerian publishing industry - Nigeria, 7 September 2007

• A Nigerian publishing firm has reported losses of over $12 million in a single year as a direct result of piracy within the industry; 718

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Algeria’s counterfeit tobacco costs country millions – Algeria, 1 September 2007

• Losing control over tobacco counterfeiting is costing Algeria $162 million a year in tax evasion; 679.

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$9 million in taxes lost from counterfeit phones – Uganda, 18 August 2007

• Simba Telecom, an authorised Nokia distributor in Uganda, has claimed the country looses $9 million each year in tax revenue through the purchase of counterfeit phones; 712

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Counterfeit cigarette warning – Thailand, 1 August 2007

• Experts attending an international conference in Bangkok last month warned that tens of billions of illicit cigarettes - smuggled or counterfeited - are sold on the black market each year; 687

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Piracy costs government $165m – Pakistan, 1 June 2007

• According to a conservative estimate the government of Pakistan loses Rs 10 billion ($165 million) annually in terms of direct and indirect revenue because of counterfeiting and trademark infringement; 663

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Massive lost of tax revenue in Indonesia – 1 January 2007

• New research has found that the country has lost Rp 219 billion ($24.3 million) in potential tax revenue annually because of counterfeiting; 627.

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Rs. 13.5 billion lost taxes due to fake cigarettes – 9 December 2006

• Pakistan’s government has reported losing Rs. 13.5 billion in tax revenue due to the prevalence of counterfeit cigarette manufacture going on throughout the country; 631.

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Sri Lanka loses 330m due to counterfeit cigarettes - 13 September 2006

• The government could lose up to 330 million rupees in taxes this year due to the prevalence of smuggled and counterfeit cigarettes in the country, Sri Lanka’s Customs Department says; 595.

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Piracy costs Brazil $5.6 billion in lost taxes a recent study claims – Brazil, 1 February 2006

• US Chamber of Commerce study late last year claims that sales of ripped-off products costs Brazil $5.6 billion in lost taxes.; 56.

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Pakistan loses around $16 million because of counterfeiting and trademark infringement - Pakistan, 1 February 2006

• Pakistan’s Anti-Counterfeit and Infringement Forum (ACIF) says the country’s government loses around $16 million in revenue because of rampant counterfeiting and trademark infringement; 59.

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Counterfeiters Hit India’s largest FMCG company – India, 1 January 2005

• Counterfeiting also costs the government Rs 900 crores in lost sales tax and excise duty; 196.

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Counterfeiters Take Big Bite Out of Big Apple – USA, 1 December 2004

• Counterfeiters took a big bite out the Big Apple’s income last year, costing the city $1.03 billion in lost tax revenue, city Comptroller Bill Thompson revealed in a recent report; 203.

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Duma Roundtable Urges Action on Counterfeiting – Russia, 1 December 2004

• The Russian Duma has recently held a roundtable on tackling counterfeiting, which is estimated to cost the government around US$3 billion in lost revenue; 206.

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32 per cent of cigarettes sold in Brazil are either contraband or counterfeit – Brazil, 1October 2004

• It is estimated the illegal cigarettes alone cause the economy to lose US 1.2 billion per year; 239.

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Paraguay – A major source of Counterfeit Cigarettes in Brazil – Paraguay, 1 September 2003

• It is estimated that Brazil loses revenue of some $500 million each year through the smuggling of cigarettes from Paraguay; 415.

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Shoe Industry hit hard by fakes in Czech Republic – Czech Republic, 1November 2000

• A recent analysis by the Czech Trade Association revealed that illegal imports were costing the government, through unpaid custom duties around 20 billion Kc (US$500 million) per year; 394.

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Drinkers plagued by fake vodka and mineral water – Russia, 1 November 1998

• The loss in tax revenue terms is staggering, equating to 30 billion roubles (US$1.9 billion) and with the economy in dire straits, it is easily understandable why the government should seek to impose a monopoly of a product close to the hearts of most Russians; 378.

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Chinese Authorities lose huge tax revenues from cigarette counterfeiting – China, 1 June 1996

• Counterfeiting cigarettes is big business in China today. The most popular brand to fake appears to be Hongtashan which has a large share of the local market. This activity is in turn having a damaging effect on government tax revenues as the authorities estimate that they lose Yuan 5 billion each year (approximately £500 million); 361.