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Home > Dail Eireann debate. Written answer 22 - Illicit trade in tobacco [8365/14].

[Oireachtas] Dail Eireann debate. Written answer 22 - Illicit trade in tobacco [8365/14]. (20 Feb 2014)

External website: http://oireachtasdebates.oireachtas.ie/debates%20a...


22. Deputy Charlie McConalogue asked the Minister for Finance the cost to the State in 2011, 2012 and 2013 of the illegal cigarette trade; the procedures and plans his Department has in place to tackle this growing problem especially in Border counties in view of the fact that a nationwide survey found that 24.5% of cigarettes sold in Letterkenny are illegal compared to a national average of 13%; and if he will make a statement on the matter.  [8365/14] 

Minister for Finance (Deputy Michael Noonan): I am advised by the Revenue Commissioners that the extent of the illicit cigarettes market in Ireland is estimated through annual surveys of smokers.  These surveys are undertaken for Revenue and the National Tobacco Control Office of the Health Services Executive by IPSOS MRBI. The survey for 2012 found that 13% of cigarettes consumed in Ireland are illicit. The comparable figure for 2011 was 14%. This would suggest that the extent of the problem is being contained, as a result of the extensive action being taken against the smuggling and sale of illicit product. A further survey was carried out at the end of 2013 and the results of this will be available in the coming months.
 
The Deputy will of course appreciate that estimating the scale of any illegal activity and the resultant tax loss is difficult. I am however satisfied that the IPSOS MRBI survey is the best indicator of the extent of the market in illicit cigarettes.  This is because of the methodologies used and the consistent manner in which the survey has been undertaken over a number of years. In addition, the survey methodology is, unlike other methodologies such as empty pack surveys, capable of distinguishing between legal personal imports and illicit cigarettes. The survey is also geographically representative and, unlike others, takes social class, age, gender and nationality into account.
 
In looking at the higher estimates of the level of illicit consumption that come from other sources, it needs to be borne in mind that the tobacco industry claims must be viewed in terms of their interest in minimising tax increases while imposing significant price increases of their own. Data from the IPSOS MRBI surveys would indicate nominal annual losses in the order of €258 million and €240 million, in excise duty and VAT, in 2011 and 2012 respectively.
 
I am assured by the Revenue Commissioners that combatting the illegal tobacco trade is, and will continue to be, a high priority for them. Their work against this illegal activity includes a range of measures designed to identify and target those who are engaged in the supply or sale of illicit products, with a view to seizing the illicit products and prosecuting those responsible. This multifaceted strategy includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies and ensuring the optimum deployment of resources at points of importation and within the country.
 
Interception of illicit tobacco products is achieved through a combination of risk analysis, profiling, intelligence and the screening of cargo, vehicles, baggage and postal packages. Revenue officers also target the illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises.
 
There is extensive cooperation with An Garda Síochána in combatting the illicit trade, and the relevant agencies in the state also work closely with their counterparts in Northern Ireland, through a cross-border group on tobacco enforcement, to target the organised crime groups that are responsible for a large proportion of the illegal tobacco market. In addition, cooperation takes place with other Revenue administrations and with the European Anti-Fraud Office, OLAF, in the ongoing programmes to tackle the illicit trade at international level.
 
In relation to tackling this problem in border counties in particular, Revenue advise me that they have an enforcement presence at key strategic locations in the border counties, and enforcement strength is regularly augmented with additional personnel on a risk assessment basis, or when particular operations against illegal activity are taking place. 10.66 million illicit cigarettes were seized in Revenue's Border Midlands West Region in 2013, and there were 15 convictions during 2013 arising from detections in the Region of the selling or smuggling of illicit tobacco products.
 
The Revenue Commissioners will remain committed to acting against all stages of the supply chain for illicit tobacco products and will continue to make very effort to ensure that those involved in the illicit trade are brought to account before the Courts for their criminal activities. A new multi-annual strategy for dealing with the problem is being drawn up, and the Revenue Commissioners will consult with key stakeholders in preparing this document.
Item Type
Dail Debates
Publication Type
Irish-related
Drug Type
Tobacco / Nicotine
Intervention Type
Crime prevention
Date
20 February 2014
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