As the Black Market continues to grow, what will the new Government do differently to tackle the blight of smuggling?

27 May 2016

Despite the prevalence of smoking in Ireland decreasing from 22% in 2009 to 17% in 2014 (Department of Health), the illicit trade of tobacco continues to be a huge burden on the public purse with an annual loss of revenue to the Exchequer. In the first five months of 2016 Revenue seized smuggled cigarettes and tobacco products worth almost €12.3 million to the Exchequer, an increase of €2 million during the same period in 2015. Meanwhile, the solid fuel sector has expressed concern over the fact the Revenue have no reliable way to estimate the size of the smuggled solid fuel trade across the border.

This €2 million increase came following the excise increase of 50c in October 2015. Benny Gilsenan, retailer and Retailers Against Smuggling (RAS) spokesperson for Leinster, commented “I struggle to see the logic of increasing excise tax not only because it drives people to the Black Market for their €3-4 pack of illegal cigarettes but it also leads to a tobacco tax yield budget shortfall which was calculated by the government in 2015 as being €223 million. In the run up to the budget, the Government really has to address the elephant in the room which is that excise increases are only contributing to the problem. ” On that basis alone, RAS calls for a moratorium on further excise increases until levels of smuggling are tackled.

In its 2015 Annual Report, Revenue found that 12% of cigarettes packs held by smokers were classified as illegal. Benny continued “The fact that 1/10 cigarette packs are illegal highlights that more intervention is necessary by the new Government to cut off the blood supply of these multi-million euro businesses run by criminal gangs. Legitimate businesses like mine are being directly affected. We pay all of our taxes, the tobacco retail licence fee and adhere to the Show Me ID programme so the Government should be protecting our legal businesses.” Increased spot checks by Environmental Health Officers on non-retail outlets are necessary to prevent the sale of illicit tobacco products and solid fuel.

“To make matters worse, of the 5,927 seizures in 2015 fines averaging €2,656 were imposed in just 89 cases. The current legislation for attaching fines only covers those already in employment. It is clear to me that this needs to be extended to those unemployment or on benefits in order to begin to deter people from selling smuggled goods on our streets” said Benny.