Joe McHugh (Donegal North East, Fine Gael)
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Question 240: To ask the Minister for Finance his views on whether the Exchequer lost €500 million due to the illegal cigarette trade in 2008; his further views on whether Customs are sufficiently staffed to address this problem; if he will increase the number employed by Customs; if his attention has been drawn to the fact that retailers here lose €500 million per annum due to this problem; and if he will make a statement on the matter. [34528/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am informed by the Revenue Commissioners, who are responsible for the collection of tobacco products tax and tackling the illicit trade in cigarettes and tobacco products, that there is no internationally recognised method for determining the amount of tax lost as a result of the illicit trade in cigarettes. However, the Commissioners have previously given a tentative estimate that approximately 20% of cigarettes consumed in Ireland in 2008 were untaxed. The tax involved would amount to approximately €380m. It should be noted however that, in addition to illicit cigarettes, this estimate also includes legal cross-border shopping purchases brought into the State for personal consumption.

As regards the question of staffing resources available to Revenue's Customs Service to combat cigarette smuggling, enforcement staff are deployed at all key ports and airports for the purpose of detection, interception and seizure of smuggled goods including contraband cigarettes. Staff numbers at these locations are subject to continuous review and these officers are frequently augmented by additional staff from other areas where the need arises for specific operational reasons. In addition, enforcement officers carry out checks at inland premises including retail outlets, markets, warehouses etc. for contraband cigarettes that may have evaded detection at the point of importation.

Enforcement action undertaken by Customs in 2008 resulted in 10,191 seizures of cigarettes totalling in excess of 135m cigarettes, while up to the end of August 2009, Customs have made 7164 seizures of cigarettes amounting to 61m cigarettes.

On the question of a possible increase in the number of Customs enforcement officers, as the Deputy is aware, this issue needs to be viewed in the context of the current restriction on recruitment in the public service. However, the number of Revenue staff deployed in particular areas has always been and will continue to be decided on the basis of business needs and risk assessment. The Commissioners also believe that improved strategies, tactics, detection techniques and training are equally if not more important than increases in the number of officers. These include more effective profiling, improved intelligence gathering, continued co-operation with the legitimate tobacco industry and the better use of scanning technology. All these matters are under continuous review as part of an ongoing assessment of Revenue's ability to deal with the increasing threat to excise duties. In this regard, a new tobacco tax stamp with added security features was recently introduced and a second container scanner is due to be delivered by the end of November.

Finally, I am aware of various reports in the media on the impact of the illicit cigarette trade on legitimate retailers. It is inevitable that retailers do suffer some loss in trade as a result of smuggling. The Commissioners therefore hope to increase the current level of detection through the deployment of improved strategies and tactics etc, as referred to above.