To ask the Minister for Finance if it is possible to allocate additional resources to deal with the growing problem of the importation and sale of illegal cigarettes here; and if he will make a statement on the matter?
Reply:
I am informed by the Revenue Commissioners, who are responsible for the collection of tobacco products tax and for tacking the illicit trade in tobacco products, that they attach a high priority to dealing with this criminal activity. Their “Strategy on Combating the Illicit Tobacco Trade (2011-2013), which is published on the Revenue website (www.revenue.ie), includes a range of measures designed to complement each other in targeting the supply and demand sides of the market for illicit tobacco products.
This multi-faceted strategy includes ongoing analysis of the nature and extent of the problem, developing and sharing intelligence on a national, EU and international basis, ongoing review of operational policies, development of analytics and detection technologies, and optimum deployment of resources at points of importation and inland to intercept and seize contraband products and to prosecute those involved.
Interception of illicit tobacco products at importation is achieved through a combination of risk analysis, profiling, intelligence and the screening of cargo, vehicles, baggage and postal packages. Revenue officers also target the illicit trade at the post-importation level by carrying out intelligence-based operations and random checks at retail outlets, markets and private and commercial premises.
In carrying out this important work Revenue works in close cooperation with other relevant agencies, both nationally and internationally. There is extensive cooperation in this jurisdiction between Revenue and An Garda Síochána, and the agencies in the State and in Northern Ireland work closely together, through a cross-border group on tobacco enforcement, to combat the organised crime groups that are responsible for a large proportion of the illegal tobacco market. In addition, cooperation takes place with other Revenue administrations and with the European Anti-Fraud Office, OLAF, in the ongoing efforts to tackle the illicit trade in tobacco products at international level.
Considerable success is being achieved in combating the illegal tobacco trade. In 2012, a total of 95.6 million cigarettes and over 5 tonnes of tobacco were seized and there were 132 convictions for smuggling or sale of illicit tobacco product.
Research, undertaken by IPSOS MRBI for the Revenue Commissioners and the National Tobacco Control Office of the Health Services Executive, indicates that the incidence of illicit packs of cigarettes in the State in 2011 represented 15%. A similar survey for 2012 indicated an incidence of 13%. While these data would suggest that the problem is being contained, the Revenue Commissioners recognise the ongoing need for vigorous action against the importation and sale of illicit tobacco products, and are committed to ensuring that the work continues to receive the high priority that has been accorded to it to date.
Revenue is conscious that those involved in the illegal trade in tobacco are constantly striving to avoid detection by seeking out new ways of smuggling the illicit product and putting it on the market, and that its own response needs to be agile and adaptive in combating this criminal activity to take account of this.
With regard to staff numbers I am informed by the Revenue Commissioners that they are a fully integrated tax and customs administration. Revenue currently has approximately 2,000 staff engaged on activities that are dedicated to target and confront non-compliance. These front-line activities include anti-smuggling and anti-evasion, investigation and prosecution, audit, assurance checks, anti-avoidance, returns compliance and debt collection. Enforcement strength at particular locations is regularly augmented with additional personnel on a risk-assessment basis, or when particular operations are taking place.
The Revenue Commissioners are subject to the Employment Control Framework staffing reductions imposed since 2009. Revenue’s overall staffing levels have reduced from a total of 6,581(FTE) at the end of 2008 to its current level of 5,740 (FTE). Notwithstanding this reduction, Revenue staff resources assigned to compliance activities have been maintained at around 2,000. The Revenue Commissioners are committed to ensuring that, despite the staff reductions, enforcement work against the illicit tobacco trade will continue to be resourced to the maximum extent possible taking account of emerging business priorities.