Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

Question 123: To ask the Minister for Finance his views of whether the illicit cigarette trade here over the past year is out of control; if he will confirm reports that the illicit cigarette trade is now larger than the cocaine trade; if he will consider an inter Departmental review of the tobacco regulatory framework in view of the growing illicit cigarette trade; if he will consider conducting a review of the impact the point of sale display ban is having on the illicit cigarette trade since its introduction one year ago; and if he will make a statement on the matter. [30426/10]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context

Question 124: To ask the Minister for Finance the number of cigarette seizures; the number of cigarettes seized; the total revenue value of the cigarettes to date since the introduction of the point of sale display ban one year ago; and if he will make a statement on the matter. [30427/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 123 and 124 together.

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 they are concerned at the level of cigarette smuggling and the illicit trade in cigarettes. It has to be acknowledged that tobacco taxes in Ireland are currently the highest in the EU and despite the comparative small size of the Irish market, significant profits can be made by fraudsters who engage in this type of illicit activity.

It is difficult to speculate as to the extent of the illicit tobacco problem. However, official figures show that between 2008 and 2009, the quantity of cigarettes on which duty was paid fell by only 6.7% (from 4.9 billion cigarettes to 4.6 billion cigarettes). At the same time, due to rate increases, the total excise duty on tobacco products increased by €45 million.

Regarding the cocaine trade in Ireland, Revenue can confirm that seizures at importation by its Customs Service have been in decline since 2008 and this is in line with current national and international trends. The current recession and non-availability of cash and capital is believed to be a factor in this decline.

I am aware that Revenue ensures that all aspects of its ability to deal with the threat of the illicit trade in tobacco products are subjected to continuous review. My Department, in consultation with the Revenue Commissioners, regularly review the legislative framework. For example, the penalties for tobacco offences were significantly increased in the Finance Act 2010 when the penalty for conviction on indictment increased from €12,695 to €126,950 or up to three times the duty paid value of the goods, whichever is the greater, and/or a term of imprisonment not exceeding five years.

Data relating to cigarette seizures over the past twelve months is as follows:

CIGARETTE SEIZURES

It should be noted that these figures are distorted by a single seizure of 120 million cigarettes in October 2009 which was the largest ever in the E.U.

There is no evidence to show that the point of sale display ban has had any effect on the market for illegal cigarettes. Prior to the display ban, counterfeit and contraband cigarettes were rarely on open display at retail outlets. In fact, a thorough search of suspect premises was usually required in order to find illegal cigarettes. Revenue have engaged with representatives of the retail outlets and invited them to supply relevant information or intelligence that would assist with this investigation.