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Retail Sector

Dáil Éireann Debate, Tuesday - 29 January 2013

Tuesday, 29 January 2013

Questions (268)

Seamus Kirk

Question:

268. Deputy Seamus Kirk asked the Minister for Finance if he has received notification of motions passed by Dun Laoghaire-Rathdown County Council, Fingal County Council, Leitrim County Council, Longford County Council and Offaly County Council, supporting the findings in the recent Retail Ireland black market report which outlines proposals to tackle the activity of criminal gangs in the laundering of fuel, smuggling of cigarettes and sale of other counterfeit goods, which is estimated to cost the taxpayer €861 million each year, as set out in Retail Ireland report Tackling the Black Market and Retail Crime; his views on the concerns as expressed by the elected members of these local authorities; the action he proposes to take to address the illicit trade; and if he will make a statement on the matter. [4233/13]

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Written answers

To date, I have only received notification of the motion passed by Leitrim County Council in relation to the Retail Ireland report. I share the concerns expressed by the elected representatives with regard to the loss of revenue arising from these illegal activities. With regard to action to deal with the illicit trade, I am advised by the Revenue Commissioners that they are mindful of the unfair competitive advantage gained by those businesses that do not fulfil their tax obligations. Revenue’s tax and duty compliance programmes are under constant review to ensure they are focussed on the areas of greatest risk, including risks from the shadow economy. Revenue tackles the problem of the shadow economy through a range of compliance and audit interventions including targeted special projects. A variety of methodologies are used by Revenue to identify those who are operating in the shadow economy including covert surveillance, cold calls to businesses and venues as well as pre-arranged aspect queries on specific items. In addition, joint operations are conducted with the Department of Social Protection using Joint Investigation Units and there is a strong focus on cash businesses, given its potential high-risk nature.

I am confident that the Revenue Commissioners are pursuing a programme that is dealing in a very determined way with tax evasion in all its forms. In 2012, Revenue carried out more than 537,000 compliance interventions, yielding more than €492 million. For the period January to August 2012, specific Shadow Economy Projects carried out by Revenue show that in the cash business, white-collar cash, construction and rental sectors, a total of 1,963 audits were undertaken, with a yield in excess of €62 million. Considerable success has been achieved in combating the illegal trade in tobacco products. In 2012, Revenue’s Customs Service seized a total of 95.6 million cigarettes from 8,105 seizures. A further 5,276 kg of other tobacco products were taken in 2012 from 1,395 seizures.

In addition to the ongoing enforcement action against the illegal fuel trade, steps are being taken to ensure enhanced control and supervision at all stages of the fuel supply chain. Key actions include a strengthening of the licensing arrangements for businesses selling auto-fuel, and of the enforcement of licensing requirements. As well as these important licensing changes, a requirement operates from 1 January 2013 for all fuel traders to make electronic monthly returns to Revenue on their fuel transactions. This will facilitate Revenue in detecting unusual or anomalous patterns of activity. Given the links of organised criminality with the illegal fuel trade, Revenue works closely with An Garda Síochána in combating it. Searches undertaken as part of intelligence-led operations have resulted in a considerable number of seizures of diesel and the closure of laundering plants, particularly in Border counties.

The Revenue Commissioners advise that in 2012, 11 oil laundries were detected and shut down and 199,000 litres of oil were seized along with 28 vehicles and five trailers. There were ten arrests in the course of these operations. In the period January to November 2012, 56 premises were closed. Finally, I am further advised by the Revenue Commissioners that they hold regular meetings with trade and representative bodies through The Hidden Economy Monitoring Group where the risks posed by shadow economy activities are discussed. The Deputy should also note that changes are frequently made in tax legislation aimed at counteracting shadow economy activity. Two examples from 2012 include the introduction of the electronic Relevant Contracts Tax regime and an enhanced penalty regime for employers who fail to operate PAYE regulations fully.

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