The main goal of the project is to research the tobacco smuggling peculiarities in Armenia and provide policy recommendations aimed at lowering the risk of smuggling in the case of tobacco tax raise, thus maximizing its positive effect on public health.

The objectives of the project are as follows:

• to expand the previous research results by including the smuggling effect;

• to provide more arguments for the policy makers to consider the tobacco tax raise while working out the tax policy;

• to provide policy recommendations to reduce the smuggling volumes;

• to assess the real effect of tax raise on the smoking prevalence given the opportunity for higher smuggling rate;

• to assess the effect of abovementioned onto the poverty groups;

• to link the research results with other researches in the sphere of tobacco control conducted by the International Center for Human Development, particularly with the tobacco taxation studies, which are aimed to calculate an optimal rate for tobacco taxes.

The research will be divided into two logical sections.

The first section will more focus on economic analyses and research. It will try to identify all existing research results re the smuggling in Armenia, assess the tobacco smuggling volumes based on existing data or by using relevant extrapolations and try to evaluate the possible changes in smuggling volumes in the case of major changes in tobacco taxation.

The research results will help to reassess the tax raise impact on poverty groups in Armenia, discussed during the previous IPF research. It will grant an opportunity to apply a more realistic scenario to the model used during the previous research.

The second section will focus on policy advice. It will be aimed at the policy makers in Armenia who have serious concerns about the smuggling perspectives in the case of tobacco tax raise. The policy paper, based on the research results, will be aimed to break the mentioned perceptions. It will also illustrate the international experience on the smuggling issues.

The policy paper will help in formulating more effective tobacco control policy with consideration of the FCTC regulations.