Oireachtas Joint and Select Committees

Thursday, 15 November 2018

Public Accounts Committee

2017 Annual Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 9: Office of the Revenue Commissioners
Chapter 17: Revenue's Progress in Tackling Tobacco Smuggling
Chapter 18: Management of High Wealth Individuals' Tax Liabilities
Chapter 19: Corporation Tax Losses

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail) | Oireachtas source

I will put some questions myself and then conclude. If the bells ring, I will just get through my questions with a view to finishing the meeting. If another member arrives that will be that.

Not being a smoker myself, I do not normally concentrate on this end of things. According to the figures the witnesses say are based on the 2017 survey, the nominal loss to the Exchequer in 2017 was €229 million. I am reading from Mr. Cody's opening statement. In regard to following these matters up, two paragraphs later Mr. Cody writes that prosecutions have resulted in fines totalling €140,250. It must be the most profitable business in Ireland. I will talk about the detection rates in a moment. I have worked out that for every euro a person has paid in a fine, on average he or she has been involved in €1,632 worth of illicit tobacco. That is like winning the lottery every morning. For the risk of being fined €1 one can make €1,632. I find that a phenomenally low figure relative to the money that can be made. Mr. Cody can see where I get these figures.

Somebody got a sentence of six months, I am sure with probation attached, a reduction in time or whatever. Revenue cannot set the terms. That is up to us. As far as I can see, however, there is zero deterrent. Someone can sell €1,632 worth of illicit tobacco, and if he or she is one of those caught he or she will pay an average of €1 in fines. One person involved in that €229 million worth of business got a short prison sentence. I know about the price differential, the tax and how cheap they are in Europe, but this also has something to do with the extent of smuggling. Is there anything more Revenue can do, or does it need more power? It might require legislation. That disparity speaks volumes. Looking at the facts, I have never seen anything as profitable as smuggling cigarettes.

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