Retailers call on Government not to increase excise in Budget 2018 as legitimate businesses will suffer

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  • August 1, 2017
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Retailers Against Smuggling (RAS) welcome the Tax Strategy Group (TSG) paper on excise that notes that Ireland now has the highest excise rates in Europe and a further increase will not necessarily lead to additional yield of revenue.  RAS believes that yet another increase will simply ensure that smuggling remains a lucrative crime, and will put small retailers out of business.

RAS spokesperson, Benny Gilsenan commented: “Just two weeks ago, Revenue seized 6.5 million illicit cigarettes coming into Dublin Port – what excise did they pay? A legitimate retailer selling tobacco at circa €11.50 per pack simply cannot compete with the €5 smuggled pack.  At less than half the price of a legitimate pack, it is no wonder that people are turning to criminal gangs and shunning legitimate retailers. Consistent excise increases and limited resources for Revenue are the reason Ireland has the third largest illicit trade in the EU.

As of June 2017, Ireland has the highest rates of duty on tobacco products, including on cigarettes and roll-your-own (RYO) tobacco in the EU. This reflects a long-standing policy of levying high rates of excise duty, relative to our fellow Member States, on tobacco products. RAS believe that it is no coincidence that Ireland is one of the most lucrative countries for criminals to target with illicit tobacco and unfortunately the TSG have suggested that a 50% duty increase on RYO in Budget 2018.

Mr Gilsenan continued: “Smuggling will only become more lucrative with this excise increase, particularly given the fluctuating sterling and the uncertainty around Brexit. TSG noted that any reductions may be due to changes in smuggling activity rather than decreases so we call on the Government not to punish retailers by increasing excise. We have been down this road before, and it has produced the same results.