Retailers call for Budget 2025 to tackle Ireland’s smuggling tsunami

Value of illegal cigarette smuggling on course to double in 2024



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5 July 2024

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Earlier this week, representative body for the retail sector, Retailers Against Smuggling (RAS), launched its pre-budget submission at Buswells Hotel on Kildare Street, opposite Leinster House, calling on the Government to rethink its policy approach towards smuggling and illicit trade in order to tackle Ireland’s smuggling tsunami.

The pre-budget submission calls on the Government to:

• Reduce/Freeze consumer taxes including tobacco excise
• Increase funding for detection and enforcement of smuggling
• Amend the Finance Act to prosecute all suspected smugglers at Circuit Court level or higher

RAS says that the scale and surmounting magnitude of the problem is clearly illustrated by the numbers with the value of illegal cigarette smuggling on course to double in 2024.

Commenting on the pre-budget submission, Spokesperson for RAS, Seamus Griffin, said: “Smuggling is a real issue, that is hitting us where it hurts most. While we as retailers play by the rules and uphold the law, smugglers are skirting around those same laws and cutting from our profits.

“It is time for a serious investment in detection and enforcement to ensure those breaking the law face real consequences. Without this, the integrity of our businesses and livelihoods are at risk.”

Major seizures

In 2023, a total of 31 major seizures came to the value of €58 million, at a loss of €45 million to the exchequer. So far, in the first half of this year alone, there has been 27 major seizures, worth a total value of around €53 million and a loss to the exchequer of €40 million.

A poll of over 1,000 Irish adults conducted in spring of this year by Irish Thinks, on behalf of Retailers Against Smuggling, found that illicit market activity is becoming more and more normalised among the Irish public, with a quarter (25%) of all respondents having knowingly purchased some goods or services from an unofficial or irregular seller in the past 12 months.

A separate survey by Ipsos MRBI on behalf of the Revenue Commissioner found that, in 2023, 19% of cigarettes packs held by smokers were illegal, smuggled tobacco with an additional 15pc were legal but non-Irish duty paid.

This is the highest level of illegality and excise evasion detected by this series of annual Revenue Commissioner surveys since they commenced in 2009.

It is RAS’ contention that the government needs to wake up and realise that smugglers are literally sticking their hands directly into the state’s till, and stealing money that could otherwise fund essential public services.

The realities of this do not yet appear to be realised, RAS added.

RAS recommendations

In response, RAS are presenting the government with three policy recommendations for
inclusion in Budget 2025, to tackle smuggling and its causes.

Proposal 1: Reduce/Freeze consumer taxes including tobacco excise

Reducing or freezing excise will help reduce the upward pressure on the price of consumer goods, in turn lessening the risk of consumers turning to the illicit market for purchase more affordable goods.

This measure to support legitimate Irish retailers and protect tax revenue to Irish exchequer.

Given that the notional tax loss from illegal cigarettes has more than doubled from €170 million to 2016 to €384 million 2022, the freezing of excise should be seen as a measure to stop the loss of tax revenue.

Proposal 2: Increase funding for detection and enforcement of smuggling

In response to a parliamentary question, the Minister for Finance has advised that there were just under 25,000 scans conducted by the Revenue Commissioner’s three mobile container scanners and backscatter van in 2023.

In the context of millions of passengers and freight unit arrivals into Ireland every year, this level of scanning is miniscule.

There is a pressing need for increased funding in Budget 2025 for resources detect and crack-down on smuggling and illicit market activity, including more X-ray scanners and sniffer dog units at more ports; more inspections at airports, and more checks to enforce duty-free travel allowances.

Proposal 3: Amend the Finance Act to prosecute all suspected smugglers at Circuit Court level or higher

The law as it currently stands allows for a court to impose a fine of up to €5,000 on summary prosecution, or up to €126,970 following conviction on indictment.

However, the level of fines actually being imposed are too insignificant to act as a real and meaningful deterrent to the smuggling and sale of illegal tobacco.

Provisions could be introduced as part the next Finance Act to require all prosecutions relating to the smuggling and sale of illegal tobacco (above a minimal threshold) to be prosecuted on indictment at Circuit Court level, or higher, to provide a real and meaningful deterrent.

With 34% of cigarettes in circulation being non-duty paid, there is overwhelming public policy rationale for adopting a tougher sentence for tobacco smuggling in Ireland.

Read more: Revenue seizes 5.8m cigarettes at Dublin Port



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