Dáil Éireann Debate, Tuesday - 26 March 2013
182. Deputy Paschal Donohoe asked the Minister for Finance if his attention has been drawn to the amount of revenue the State lost last year as a result of the importation of illegal tobacco and tobacco products; if he will consider increasing the fine for this offence as a measure to curb the amount of illegal importing taking place; and if he will make a statement on the matter. [14757/13]
View answerI am advised by the Revenue Commissioners that determining the extent of any illicit black market activity and the losses that it causes to the Exchequer is problematic, and that any estimates of such losses need to be viewed with caution. I understand that a survey in respect of 2011 carried out for the Revenue Commissioners and the Health Services Executive found that some 770 million illicit cigarettes were consumed in the State. This would indicate a loss of the order of €258 million, in excise duty and VAT, in that year. A similar survey was undertaken in 2012 and the final results are being compiled at present.
The Revenue Commissioners are conscious that, in addition to the loss of tax revenues, the illicit tobacco trade poses a threat to legitimate businesses and to the Government’s policy of discouraging smoking. Taking action against this illegal activity is, therefore, a high priority for them. Their programme of action resulted in the seizure of over 95 million cigarettes and 5,276 kilograms of tobacco in 2012, and 132 convictions were secured during the year in respect of the smuggling or sale of illicit cigarettes or tobacco.
The penalty in the case of a summary conviction for either the smuggling of tobacco products or the illegal sale of unstamped tobacco products is a fine of €5,000 or a term of imprisonment not exceeding 12 months, or both a fine and a term of imprisonment.
The fines that may be imposed where a person is convicted on indictment of a tobacco-related offence were increased substantially by the Finance Act 2010. In the case of a conviction on indictment for smuggling, a fine not exceeding €126,970 or, where the value of the goods concerned is greater than €250,000, an amount not exceeding three times their value, may be imposed. A term of imprisonment not exceeding 5 years may be imposed instead of, or in addition to, a fine. Where a conviction on indictment occurs in respect of the illegal sale of unstamped products, the Court may impose a fine not exceeding €126,970, or a term of imprisonment of up to 5 years, or a fine and imprisonment.
The specific penalty to be imposed in a particular case is a matter for the Courts. Section 130(3) of the Finance Act 2001 permits a trial judge, in his or her discretion, to mitigate a fine incurred for an offence under excise law, provided that the amount so mitigated is not greater than 50% of the amount of the fine.
I consider that the maximum fines available are sufficiently high at present, having been raised to the current levels in 2010. The penalty imposed by the Court in any particular case is a matter entirely for the Court. In general, the level of penalty applied appears to be well below the maximum provided for in law.
