Brendan Smith (Cavan-Monaghan, Fianna Fail)
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397.To ask the Minister for Finance to consider the issues raised in a pre-Budget submission by a representative organisation (details supplied); and if he will make a statement on the matter. [33179/24]

Jack Chambers (Dublin West, Fianna Fail)
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The Deputy should note at the outset that Revenue has assured me that it is committed to targeting the illicit tobacco trade and implements a range of measures to identify and target the smuggling, supply or sale of illicit tobacco, including duty free tobacco in excess of duty-free allowances, and where possible, prosecuting those involved. Revenue’s strategy involves developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies and ensuring the optimum deployment of resources on a risk-focused basis. Revenue keeps its operational requirements and arrangements regarding the deployment and use of detection technology and resources, including a suite of x-ray scanners, electronic risk analysis tools and maritime cutters, under continuous review having regard to ongoing risk assessment of smuggling and criminal activities and evolving operational needs.

In that context, I am aware that Revenue monitors trends in the illicit tobacco trade on an ongoing basis and adjusts its actions and redeploys its resources in response to new developments or methodologies employed by the criminal gangs involved in that trade. I am advised by Revenue that for operational reasons, it cannot provide details of the location of specific deployments of its suite of scanning equipment, but I can confirm that these are national resources that can be deployed throughout the country. I am satisfied with the risk-focused approach adopted by Revenue.

The smuggling of tobacco products has a transnational and cross border dimension and in addition to Revenue’s ongoing cooperation with An Garda Síochána in this area, Revenue also works closely with its counterparts in other jurisdictions including colleagues in Northern Ireland through the Cross Border Joint Agency Task Force (JATF) and international colleagues including OLAF (the EU’s anti-fraud agency), Europol and the World Customs Organisation.

In its efforts to detect the importation of excess duty-free goods, Revenue uses a combination of risk analysis, profiling, intelligence, screening of checked-in and carry-on baggage and the deployment of its detector dog teams. Focused, risk-driven compliance projects are also undertaken in respect of breaches of duty-free limits.

Revenue optimises media engagement in terms of successful prosecutions, significant seizures and enforcement initiatives, ensuring the general public is aware of the commitment by Revenue to tackling the illicit cigarette and tobacco trade and to deter those involved. To further encourage the general public to engage with Revenue in its efforts targeting the shadow economy and the supply of illegal tobacco products, Revenue includes a message on all press releases relating to tobacco products notifying that businesses or members of the public can contact Revenue in confidence on the free phone number 1800 295 295.

I am pleased to acknowledge that Revenue has achieved considerable success in tackling the illicit tobacco trade. In 2023, Revenue had 5,164 seizures of cigarettes with an estimate value of €55.7m and 1,673 seizures of tobacco with an estimated value of €7.7m. As at the end of June 2024, Revenue had 2,529 seizures of cigarettes with an estimated value of €49.1m and 775 seizures of tobacco with an estimated value of €29.5m. In addition, in 2023 Revenue secured 92 convictions, of which 5 were indictable, and to the end of June 2024, it secured 46 convictions, of which 4 were indictable, in relation to the smuggling or illegal sale of cigarettes and tobacco products.

Further successes highlighting Revenue’s approach to the illicit tobacco trade include the detection and dismantling of an illicit commercial cigarette factory in Dublin in February 2024. This detection was as a result of an intelligence-led operation and investigations are ongoing nationally and internationally. Revenue’s high detection rate is attributable to its multi-faceted tobacco strategy, continued cooperation and intelligence sharing with other national and international law enforcement agencies and its advanced profiling methods and strategic use of appropriate detection technology and assets.The legal framework relating to fines for the sale of illicit tobacco are contained in Tobacco Products Tax (TPT) legislation, as set out in Chapter 3 of Part 2 of the Finance Act 2005 (as amended). Sections 78 and 78A of the Act provide that, without prejudice to any other penalty, any person convicted of an offence in relation to the illegal selling of unstamped tobacco products or of illicit production, storage or delivery of such products, or for fraudulent use of tax stamps shall be liable to the following sanctions:• On Summary Conviction – a fine of €5,000 or a term of imprisonment not exceeding 12 months, or both.• On Conviction on Indictment – a fine not exceeding €126,970 or imprisonment for a term not exceeding 5 years, or both.

Fines for summary offences are now set at the maximum level that may be applied in accordance with the District Court Guidelines. Following a review in 2010, fines for indictable level offences were increased tenfold from €12,695 to €126,970. Where the value of the excisable products concerned is greater than €250,000, then a fine not exceeding three times the value of the excisable products concerned could be imposed. The discretion of the court to impose a fine and/or term of imprisonment not exceeding 5 years was retained. The amendment sought to ensure that the fines which may be imposed better reflected the seriousness of the offences involved and served as an effective deterrent. However, Revenue has no role in how fines are imposed; that is solely a matter for the judiciary.

Further sanctions are set out in General Excise law. Section 119 of the Finance Act 2001, as amended, sets out additional penalties for tobacco smuggling. Where the value of the goods concerned is greater than €250,000, including any taxes chargeable thereon, an amount not exceeding three times their value may be imposed and/or a prison sentence of up to 5 years.The position in relation to sanctions in respect of tobacco offences will be kept under review. While the Government has ensured through the Finance Acts over the years that Revenue has the necessary statutory powers to tackle the illicit tobacco trade, I am open to considering proposals from Revenue that will address new or emerging risks which cannot be addressed through the current and significant legislative framework in place in regard to tobacco smuggling.This Government has also been consistent in its strong support for ensuring that Revenue has the necessary resources to fulfil its mandate in respect of functions that are critical for its effective functioning as a tax and customs administration.Finally, I am assured that Revenue is very alert to the threat that tobacco smuggling poses to health, to legitimate business interests and to the Exchequer and I commend Revenue and all the relevant State agencies for their work in this important area.