Black market ‘costs State €860m’

Retail Ireland has told a Dáil committee that full implementation of recommendations it recently made about tackling the black market economy could save the exchequer about €400m to €500m annually, and help create “tens of thousands of jobs” in retail.

Representatives of the Ibec-affiliated industry body and Risk Management International (RMI) told the joint Oireachtas committee on jobs, enterprise, and innovation that cross-department, “whole of Government” support is needed to tackle a problem which is costing the State over €860m per year.

Retail Ireland chairman Frank Gleeson said an equalisation of duty rates between green and road diesel could overnight eradicate much of the €150m being taken away from the exchequer through illegal fuel trading.

Mr Gleeson, along with Retail Ireland director Stephen Lynam, and RMI chair Tony Hickey, told the committee that a combination of potentially large profits and a low threat of meaningful fines were acting as a continual opportunity for criminal gangs to continue black market activity.

“In order to tackle both fuel laundering and the illicit tobacco trade, it is necessary to reduce the current incentives to criminals to engage in such black market activities,” Mr Hickey said.

“Fines and prison sentences must be brought into line with the enormous profits made available to criminals — average fines of just €1,349 for cigarette smuggling, in 2011 make a mockery of the efforts being put in by the Revenue and gardaí to shut down black market operators.”

Mr Gleeson also said that while a lowering of tobacco prices is not expected, any increase in tobacco tax cannot be afforded as it would play into the hands of those profiting from illegal cigarette sales.

The recent report by Retail Ireland showed 12% of all diesel sold in Ireland is illegal and nearly 25% of cigarettes sold are sourced from the black market — with revenue from legal cigarette sales falling by €2.4bn in the last decade.

The body also highlighted the impact on the exchequer of problems such as digital pirating, counterfeit goods sales, and shoplifting.

It recently reported that €500m worth of shop stock is being stolen every year.