Mr. Frank Gleeson:

I will deal first with the question on fuel laundering as it is easier for me to answer.

Certainly, the harmonisation of taxes between North and South would be a good idea, of that there is no doubt. However, the fundamental fix, as Deputy Michael Conaghan said, is equalising duty rates for green and road diesel because we would eliminate the opportunity in respect of the figure of 53 cent immediately. Our recommendation indicates that a rebate scheme for farmers should guarantee no cash flow implications and minimise paperwork. The scheme should be linked with other regular agriculture payment schemes and its operation could be outsourced by way of a competitive tender process to reduce costs. The problem would be fixed overnight if we were to equalise duty rates for green and road diesel and there would be no need for enforcement, other than in the Border counties.

On a positive note, there has been some action taken by Revenue and the Garda such that there is now in place a licensing regime for green and road diesel and every service station must have two licences. This is being enforced by the Revenue Commissioners locally, which is welcome. There is also the "know your customer" fuel tracing Revenue online product information system that will be introduced in February. These are positive steps, but they are only stemming the tide of what is significant activity engaged in by illegal gangs.

On the use of dye, criminals will just figure out a new way of taking it out. Every time we have a new dye, this happens within three to six months. I agree with both Deputies and the Senator that the fix is equalisation.

In regard to tobacco, we published both figures for the reason that there are conflicting figures. Revenue states the figure is €250 million, whereas the trade associations, retailers and tobacco manufacturers believe it is closer to €500 million. Whatever number we use, it is still a massive cost to the Exchequer. If it is €250 million, that amounts to the extra taxes or cuts we have to raise or make for citizens, which is unacceptable. Our latest intelligence is based on the many things we do in the industry. For example, we pulled packets out of litter bins around the country to see what was the percentage of illegal tobacco cartons discarded. This is a very good barometer of where there is activity and the level varies dramatically. For example, in Waterford there were high levels of up to 40%, whereas in Dún Laoghaire it was 10%, with the average figure being approximately 30%. It is a huge problem and, whether the figure is €250 million or €500 million, we have to tackle it.

Our recommendation is more resources should be provided. Such is the scale of the problem, it is our belief that in the short term we probably need to put a competitive tender in place to have some experienced investigators do the investigation work for the Garda and the Customs service and then let the Garda and the Customs service take enforcement action. The process would pay for itself almost overnight.

In terms of extra taxes on what is already a heavily taxed product and retail business, we have reached a tipping point. Anyone who knows anything about the retail business will say tobacco is overtaxed relative to the position in other markets. Therefore, while there is that attractiveness, it presents a big opportunity for smugglers. While I do not believe the taxes can be cut because the Government needs the money, our message is that we cannot afford any more. Clearly, there should be an awareness programme similar to the one in place in the United Kingdom where the www.dodgycigs.co.uk website tells people about the implications and dangers of buying tobacco. It is not good for the individual, but it is also not good in terms of the cost to the individual through extra taxes or cuts.

That is the high level feedback I wanted to give to the committee. Perhaps Mr. Hickey might like to add to what I have said.