An organisation which represents more than 3,000 retailers is demanding that the Government provides increased resources to Customs units to crack down on cigarette smuggling, and also support a bill which provides on-the-spot fines for those who purchase illicit tobacco, alcohol, and solid fuel.
Retailers Against Smuggling (RAS), representing small and medium-sized retailers nationwide, says the Government should not increase excise on tobacco products in the forthcoming budget, as it would only lead to further smuggling.
RAS spokesman Benny Gilsenan, who runs a shop in Dublin, also urged the Government to support a Fianna Fáil-proposed Sale of Illicit Goods Bill which provides for on-the-spot fines for purchasers of illicit products.
He said that, with Brexit looming, the Government has to provide increasing resources to the Revenue Commissioners to tackle the potential for even more cross-border alcohol, tobacco, and solid fuel smuggling.
It is estimated, by Grant Thornton, the illicit trade in tobacco products cost the Irish exchequer €2.4bn in lost revenue between 2010 and 2015.
A standard pack of cigarettes in a legitimate shop costs around €11.50, whereas a smuggled pack costs approximately €5 to the buyer.
Ireland is 189% more expensive for tobacco products than the average European price, and 175% higher for alcohol.
Legitimate cigarettes in some parts of Europe can be bought for as little €3 a pack, even with excise duty in the country of origin paid.
However, major smugglers have been turning to fake cigarettes, known as illegal whites, which are made in sweatshops in Asia, Eastern Europe, and the United Arab Emirates.
The packets come with fictional brand names such as Excellence, Palace, President, CK, Gin, Ling, and M&G and cost as little as 20c a packet to manufacture.
They have been found to contain asbestos, lead, arsenic, traces of rat poison, and human excrement.
“The Revenue Commissioners stated in the recent Tax Strategy Group papers that we must ‘remain vigilant that reductions [of seizures] may be due to changes in smuggling activity’,” said Mr Gilsenan.
“This is a great concern to retailers, especially as Minister [Simon] Coveney recently warned of the increased danger of smuggling with an unresolved border situation.”
He pointed out that the legitimate trade of alcohol, tobacco, and solid fuel accounts for up to 50% of a retailer’s business turnover.
“The ever-increasing excise applied to tobacco products is undermining our ability to do business whilst making life considerably easier for criminal engaged in smuggling,” he added.
The Sale of Illicit Goods Bill proposed by Deputy Declan Breathnach provides for on-the-spot fines.
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