High taxes 'making Ireland a target'


TOBACCO SMUGGLING:IRELAND HAS the highest rate of tobacco taxation in the EU, making it a target for smugglers despite the small size of the market, according to the Comptroller and Auditor General’s report.

Tobacco smuggling costs the exchequer at least €200 million a year in lost taxes as well as undermining health policy aims to reduce the level of smoking, the report states.

The report says Revenue should estimate the level of illicit tobacco importation and report the results in an open, transparent manner.

Revenue, which says organised crime is centrally involved in the trade, is faulted for not developing a strategy based on regular estimates of the size of the problem.

Revenue operates two X-ray scanners to check for illicit goods in containers and vehicles, one which is based in Dublin Port and the other in the southeast. It says the identification of suspect consignments has become more difficult because smugglers increasingly use the tax registration details of legitimate traders.

The report says there has been limited success in using the X-ray scanners to detect contraband cigarettes; last year, the two devices detected 22 million illicit cigarettes. It suggests a comparison with the detection rates achieved in other countries be carried out.

The total number of cigarettes seized has grown from 74 million in 2007 to 135 million in 2008 and over 218 million last year. The report says the extent of seizures does not necessarily indicate whether this is impacting on the size of the illicit trade.