Belgium lost an estimated €963 million in excise tax revenue in 2025 due to the growing consumption of illegal cigarettes, according to a study released Wednesday by

consultancy KPMG and commissioned by Philip Morris International (PMI).

The report found that the use of counterfeit and smuggled cigarettes increased by 60% last year, reaching 2.09 billion cigarettes. These illicit products accounted for nearly one-quarter of all cigarettes consumed in Belgium.

When combined with legally purchased cigarettes brought into the country from abroad, total cigarette consumption that did not generate Belgian excise revenue rose to 3.17 billion units, representing 37.6% of the market. PMI described the figure as a record high.

A spokesperson for the tobacco company said the actual loss in excise revenue is likely to be significantly higher than the estimate provided in the study.

The report also highlighted the origins of non-taxed cigarettes consumed in Belgium. Nearly one in four cigarettes smoked in the country came from Bulgaria, a trend PMI largely attributes to illegal imports. Meanwhile, purchases made in neighbouring Luxembourg, where tobacco taxes are lower, accounted for approximately 730 million cigarettes.

Despite the rise in untaxed cigarette consumption, overall cigarette use in Belgium declined slightly. Total consumption fell by 1.5% in 2025 to 8.42 billion cigarettes, according to the study. Photo by SimonDes, Wikimedia commons.