Ireland - 2009 Report of the Comptroller and Auditor General..

September 19, 2010 - Ireland has the highest rate of tobacco taxation in the EU. This makes Ireland, despite the small size of the market, a target for the smuggling of illegitimate products into the State. Illegal importation of tobacco products represents a loss to the Exchequer and the availability of cheap products undermines health policy which aims to reduce the level of smoking. Ireland - highest tobacco prices in the EU..

Report of the Comptroller and Auditor General 2009, Chapter 15, page 205 Counteracting Smuggling of Tobacco, September 15, 2010.

Excise duty on cigarettes and fine cut tobacco (‘roll-your-own’) is payable by means of the purchase of security stamps118 which are affixed to the packet beneath the cellophane wrapper. Excise duty on other tobacco products such as cigars and pipe tobacco is payable by reference to the weight of the product.

There is no published official estimate of the extent of evasion of duty on tobacco products in Ireland. Revenue has in recent years, in conjunction with the Office of Tobacco Control,commissioned surveys, based on market research, which attempt to estimate the scale of illicit cigarette consumption and consumption of cigarettes untaxed in Ireland but purchased legitimately abroad. The most recent survey in 2009 estimated that 20% of cigarettes consumed in Ireland were untaxed. The figure for illicit consumption was put at 14% which would equate to a loss to the Exchequer of approximately €200 million (261,209,247.88 USD). The balance of 6% related to legal untaxed (in Ireland) cigarettes.

Revenue has stated that it is currently undertaking an analysis of the economics of tobacco with a view to obtaining a better understanding of the market for tobacco in Ireland. Revenue has stated that organised crime is centrally involved in the illicit cigarette market.

The priorities for 2010 included “tackling the social and fiscal menace of tobacco smuggling to prevent it undermining government finance and public health policy”.

An aid to identification of illicit tobacco products is X-ray scanners. X-ray scanners can identify illicit goods in containers and vehicles. The scanner takes an X-ray image of the container and officers interpret that image based on training and experience. Revenue first acquired a scanner in 2006 and a second one was acquired in late 2009. One scanner operates in and around Dublin Port and the other, while based in Rosslare, is available to other regions as required. It is only possible to scan a small percentage of the containers that arrive each week in
Dublin Port (approximately 10,000). The report says the identification of suspect consignments has become more difficult because smugglers increasingly use the tax registration details of legitimate traders.

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.

Reference: High taxes 'making Ireland a target', PAUL CULLEN Consumer Affairs Correspondent, IrishTimes.com, 9/16/2010.

Some Ireland related news briefs:
Ireland - police force says gangs making €3m a week from illegal cigarette sales..;
Ireland - time for major effort to crackdown on tobacco smuggling..;
Ireland - tobacco smuggling has reached record levels..;
Ireland - Office of Tobacco Control 2009 Annual Report..;
Ireland retailers claim since display ban smuggling up - denied by health campaigners..;
Ireland - highest tobacco prices in the EU..;
Ireland - smoking on the increase with young women in lower-income groups..;
Ireland - Illicit tobacco trade booms..;
Ireland - no increase in excise duty on tobacco products worry about smuggling..;
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Ireland - harder to quit when switching to low tar cigarettes..;
Ireland - after 2004 smoking ban decline in maternal smoking rates as well as lower risk for preterm births..;
Ireland - cancer society urges government to increase cigarette tax..;
Ireland - increase fine for cigarettes imported illegally..;
Ireland - roll your own cigarettes making a comeback..;
Ireland - lots of smokers - lots of sickness - resulting in premature death - THIS HAS TO STOP..;
Ireland - people responding well to the ban on cigarette displays..;
Ireland - Prof Clancy not enough spent on prevention..;
Ireland - tobacco vendors must register by October 1, 2009..;
Children - exposed to cigarette smoke in cars have greater chance of respiratory distress..;
Ireland - tobacco companies not helping small retailers - display ban..;
Tobacco control initiatives starting Wednesday, July 1, 2009..;
Ireland - Office of Tobacco Control 2008 annual report - Positive..;
Ireland - modest penalty for cigarette smuggling..;
Ireland - to amend tobacco legislation to to include pictoral warnings..;
Ireland - as of July 1, 2009 no advertising or display of tobacco products will be permitted in retail outlets..;
Ireland - cigarette tax abandoned over smuggling fears..;
Ireland - may raise tax on cigarettes as part of emergency budget..;
Ireland - ban smoking in cars when kids are present..;
Ireland - further provisions of the Public Health (Tobacco) Acts 2002 and 2004 are to be commenced on 1 July 2009.;
Ireland - 80% of smokers want a ban on tobacco advertising in shops to stop youngsters starting the habit..;
Ireland to ban tobacco displays..;
Ireland - reduction in admissions for acute coronary syndrome...