Cigarette and tobacco smuggling operations from North to South Cyprus is said to be costing the South millions of euros in lost tax revenues.
Many Greek Cypriots chose to shop in the TRNC because it is cheaper, particularly cigarettes. Most items confiscated by the Greek Cypriot customs are cigarettes and tobacco.
Additionally, the devalued lira makes shopping in the North even more tempting to those coming from South Cyprus.
The only way to reverse the trend would be to cut tax on cigarettes, it is said. Currently the Greek Cypriot government was estimated to have lost 20 million euros in tax revenues last year. This is expected to increase to 22 million euros by the end of the year.