Dáil Éireann Debate, Thursday - 4 October 2012
25. Deputy Éamon Ó Cuív asked the Minister for Finance if his attention has been drawn to recent reports that more than €500m in revenue is lost annually as a result of tobacco smuggling; his views on whether these are accurate figures; his plans to take additional measures to combat such illegal activity; and if he will make a statement on the matter. [42313/12]
Amharc ar fhreagraI assume the Deputy is referring to a Market Survey Report carried out on behalf of the Tobacco industry in the second quarter of this year. I am informed by the Revenue Commissioners that they do not accept that the figures in this report accurately measure the extent of the illicit tobacco market in Ireland for the following reasons. Firstly this survey is based on an empty discarded pack collection and does not distinguish between illicit product and product legally imported by passengers arriving in to the state from other jurisdictions. Secondly, I am informed by the Revenue Commissioners that their office and the Tobacco Control Unit of the Department of Health commissioned surveys in 2009, 2010 and 2011 to establish the level of the illicit trade in tobacco. Revenue and the Tobacco Control Unit are both satisfied that this survey is more robust and comprehensive and distinguishes between tobacco products, which are legally imported and smuggled product. The surveys for 2009 and 2010 estimated that 20% of cigarettes consumed in the State had not been taxed in this jurisdiction. This figure was further broken down as 14% illicit product and 6% legally imported by passengers arriving into the State from other jurisdictions. These findings were based on the 2006 Census population figures. By applying the most up to date population data, the 2011 census population figures, which have recently become available, IPSOS MRBI have now revised the illicit percentages to 16% for 2009 and 15% for 2010. The recently published results from the IPSOS MRBI survey for 2011 indicate that illicit consumption accounted for 15% of the market, resulting in a loss to Revenue of approximately €258m (Excise and VAT).
I am informed by the Revenue Commissioners that the tackling of this illicit trade remains a key objective.
In 2010 Revenue established a high-level internal group, chaired at Commissioner level, to examine the risks related to tobacco products tax evasion and to oversee and optimise the detection of contraband and counterfeit tobacco products. This group has promoted a number of initiatives aimed at counteracting the illicit trade in tobacco. These include the adoption of a comprehensive tobacco strategy which is published on Revenue’s website www.revenue.ie . The strategy underpins a number of programmes, which are designed to complement each other in targeting the supply and demand sides of the market for contraband tobacco in Ireland. Key elements of these programmes include developing and sharing intelligence on a national, EU and international basis, development of analytics and detection technologies, and ensuring optimum deployment of resources at point of importation and within the country, in order to intercept the contraband product and to prosecute those involved.
In 2011, a total of 109.08m cigarettes with a retail value of €45.95m and 11,158 kgs of tobacco with a retail value of €4m were seized by Revenue. In addition to this Revenue has obtained one hundred and three convictions relating to cigarette smuggling, with fines of €138,800 imposed, and thirty-one custodial sentences of which twenty-one were suspended. There were a further fifty-seven convictions relating to the sale of unstamped tobacco products with fines of €115,850 imposed, and fourteen custodial sentences of which seven were suspended.
In 2012 to date a total of 81.1m cigarettes with a retail value of €36.6m and 3,338kgs of tobacco with a retail value of €1.2m have been seized by Revenue. In addition to this Revenue has obtained forty-one convictions relating to cigarette smuggling, with fines of €69,250 imposed, and nineteen custodial sentences of which five were suspended. There were a further fifty-two convictions relating to the sale of unstamped tobacco products with fines of €89,800 imposed, and twenty custodial sentences of which twelve were suspended.
Revenue also consistently monitors ongoing developments in available x-ray and other technologies, and the selection and deployment of detection equipment is constantly reviewed. In this regard Revenue has recently purchased an additional mobile X-Ray van which it hopes to have commissioned by the end of this year.
