Jim O'Keeffe (Cork South West, Fine Gael)
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Question 15: To ask the Minister for Finance the resources available to the Revenue Commissioners and the Customs Service to combat cigarette smuggling; his views on whether such resources are adequate; and if he will make a statement on the matter. [12459/09]

Jim O'Keeffe (Cork South West, Fine Gael)
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Question 18: To ask the Minister for Finance the estimated amount in value of cigarettes smuggled into Ireland in each of the past three years; and the loss to the Exchequer arising therefrom in each of the three years. [12458/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 15 and 18 together.

I am informed by the Revenue Commissioners that they are not in a position to provide a reliable estimate of the number and value of cigarettes smuggled into Ireland in each of the past three years due to the fact that there is no proven method for determining this figure.

Estimating the tax gap or the amount of tobacco tax lost as a result of smuggling is particularly difficult because of the multiple factors that have to be taken into account. For instance, a drop in the overall tax take may be partly due to a decline in smoking levels as a result of the various anti-smoking campaigns. Increased legal purchase of duty paid cigarettes in other EU member states for personal use is also a factor, particularly in the context of low cost air travel and more frequent foreign holidays. This, of course is perfectly legal in the context of the EU principle of freedom of movement. Consequently the only reliable information available which I can give to the Deputy is the quantity and value of contraband cigarettes intercepted and seized by Customs and also the volumes of cigarettes on which duty is collected each year.

Details of the above for each of the past three years are as follows:

Revenue is aware of a variety of methodologies that are used internationally by the tobacco industry and some Customs and Revenue Administrations for the purposes of estimating the quantity and value of cigarettes smuggled into their jurisdictions. The variety of factors taken into account include:

national estimates of the overall number of cigarettes consumed each year

estimates of the quantity of cigarettes brought into the State legally by cross- border shoppers

surveys of empty (discarded) cigarette packs conducted at periodic intervals throughout the country

the volume of cigarettes on which excise duty is charged annually the number of cigarettes seized by customs.

It is evident that the only precise information that Revenue can confirm are the last two items listed above i.e. the volume of cigarettes on which duty has been collected and the actual quantity of cigarettes seized. The remaining factors require a significant level of speculation and extrapolation.

While the various estimates published in the media are at best speculative and are likely to include cigarettes purchased duty paid in other Member States brought into the State for personal consumption, the significant increase in the number of cigarettes seized in 2008 and the reduction in duty paid deliveries suggest that the overall level of smuggling may have increased.

While Revenue are not in a position to estimate the volume of smuggled cigarettes they very tentatively estimate that about 20% of cigarettes consumed in Ireland may be untaxed in Ireland. This however includes substantial quantities of legitimate personal imports from other EU Member States and should be treated with caution.

Turning to the question of resources available to Revenue's Customs Service to combat cigarette smuggling, enforcement staff are deployed at all key ports and airports in the State for the purposes of detection, interception and seizure of both contraband cigarettes and drugs. Staffing at these locations is subject to continuous review and staff numbers deployed at these locations are often augmented by additional staff from other areas particularly where specific operations are organised.

Maritime freight and passengers arriving from high-risk countries are targeted on the basis of risk analysis which is carried out by specialist intelligence teams. Customs relies heavily on intelligence from other Customs Administrations and receive valuable assistance and co-operation from the European Anti-Fraud Office, OLAF. There is also close co-operation with An Garda Síochána and multi-agency operations continue to be mounted where appropriate. Revenue also liaises with the Office of Tobacco Control. In addition, Revenue receives close co-operation and information from the legitimate tobacco manufacturers and has regular meetings with these companies along with the Irish Tobacco Manufacturers Advisory Committee (ITMAC). The international agreements signed by Ireland along with other Member States and the Commission with Philip Morris International and Japan Tobacco International are also utilised.

Staff carry out checks and searches at inland premises for contraband that may have evaded controls at the point of importation. Customs also utilise the latest scanning technology and tobacco detector dogs to assist them in detecting contraband. A Mobile Container Scanner was acquired two years ago and is normally based in Dublin where it is used to scan both accompanied and unaccompanied freight. The scanner is also deployed in the other major ports as the need arises. A procurement process to acquire a second Mobile Scanner is currently in train. Smaller baggage/parcel scanners are also located at the four major airports in Dublin, Shannon, Cork and Knock. Similar scanners are located at the ports of Rosslare and Ringaskiddy and at Portlaoise Mail Centre for screening mail. In summary, while overall staff numbers in Revenue are being reduced, in the context of the Government decision on expenditure controls, the number of staff engaged in front line enforcement work in tackling smuggling and protecting tax receipts is being maintained and the position is being kept under review.