Mr. Gerard Moran:

I have written down most of the questions and hope that I can read my scrawly writing. I shall try to respond satisfactorily to as many of the questions as possible.

One of the first questions came from Deputy McLellan and related to the drop in numbers that I quoted. It is important to bear in mind that figures for any particular year - particularly going back a few years - are easily distorted by the seizure of a small number of huge consignments. That is why I must stress that the far more important measure for us is the survey results on the incidence of illicit consumption. We need to highlight that fact even though the organisation has tended to highlight the seizures because everybody likes to talk about their successes. The important measure is the survey data on the incidence.

In my statement I said we believed that the reduction in the volumes - particularly in the most recent year - are associated with an evolution in the way organised crime groups are operating and, in particular, supplying the Irish market. Before now, some stuff might have been routed through Ireland for the UK market. Some of the seizures that we made in the past few years were so large that they could not have been destined for the Irish market. Now, instead of being used as a route to other markets, the Irish market may well be served in smaller quantities from the continent or the UK. The business of traffickers is constantly evolving and reflects their experience of the way enforcement authorities get on top of a certain situation and respond. Traffickers keep changing their tactics. I hope I have explained what the numbers mean and how we interpret the data.

A question was asked about how we dispose of seized cigarettes. I can confirm that they are incinerated.

We were asked whether we supported the Government's demand reduction policy. The question was asked as though there were an assumption on the part of some people that the Revenue Commissioners are revenue maximisers. We are not. We simply implement the law and follow Government policy. The job of the Revenue Commissioners is to collect whatever tax is payable and deal with whatever evasion and fraud is associated with tax.

An interesting question was asked about the notional loss of €240 million. I want to stress the term "notional loss" and how it compared with the tax gap or loss in other sectors. Tobacco is probably unique in being the only area that we tend to quote a loss for because it flags for Revenue internally and for the wider public the significance of the problem. We have good solid survey data that allows us to do this work. Generally we do not do tax gap analysis because it is fraught with enormous difficulty. Some tax administrations do so but they always heavily qualify the work by saying that it is usually to be relied on more as an indicator of trends than as an estimation of the quantum. That latter bit always tends to be forgotten.

A question was asked about whether we needed an all-Ireland or all-island approach. We have already adopted such an approach, and the assistant commissioner gave details. All of the law enforcement agencies North and South meet on a quarterly basis to ensure good co-ordination and sharing of intelligence and information. My information is that the scheme works effectively, and the assistant commissioner mentioned some of the results that have flowed from its work.

A question was asked about the need for supply chain controls and their desirability. That is a key issue. Revenue is really interested in supply chain controls and a track and trace regime that will operate in the global black spots located in the source and transit countries. There is probably not a lot to be gained from a very high-tax country like Ireland investing heavily in a domestic track and trace system if the source and transit countries are not brought on board. A big job of work needs to be done at EU level or through whatever forum. We must seize an opportunity to pursue what we view as problem countries at the G20 or G8 forum in order to put pressure on them.

It is clear from the European Commission's communication on the issue that it speaks about enhanced co-operation with source and transit countries. Members of the committee can decode this for themselves.

There was a question on whether there had been a drop in the level of resources. Revenue has had a significant drop in the level of resources, probably from about 6,700 to 5,800 or 5,700 - I do not have the exact number. In achieving that reduction in recent years we have maintained the number of staff involved in compliance work. That includes the staff available to work on illegal tobacco issues, smuggling and street level activity, with which we have to contend. We have preserved these numbers in the face of a big aggregate reduction and are committed to doing this so far as we possibly can do so.

There was a question about the readiness of Revenue to take on track and trace functions. The policy and shape of the administrative arrangements or regime are settled on for the European Union, but they need to go a little further. From Revenue's perspective, our interest is in the supply chain in source and transit countries rather than in high tax countries. If somebody starts to try to source cigarettes in Ireland to sell them in eastern Europe, he or she will go out of business quickly, unless they are diverted, as we police the area very tightly.

I hope I am not taking too long to respond. If so, the Chairman may interrupt me.