Revenue defends level of inspection on US shoppers

THE Revenue Commissioners have defended the low level of customs inspections on Irish shoppers arriving from the US during the pre-Christmas period after it emerged less than 2% of passengers exceeded the duty limit.

However, the Dáil Public Accounts Committee heard yesterday that an average of just 10 passengers from each transatlantic flight arriving in Ireland between October and December were stopped and searched. Most aircraft on such routes carry more than 400 passengers.

Revenue chairman Frank Daly explained that Customs’ efforts were focused on the greater financial and societal threats posed by drugs and tobacco smuggling than people importing goods worth in excess of their personal limit of €175. However, he acknowledged that the phenomenon of thousands of Irish people travelling to the US for pre-Christmas shopping had arisen in the past few years.

Mr Daly said a special operation in airports at Dublin, Shannon and Knock from October to mid-December had resulted in just €22,921 being collected in VAT and duties.

“As in previous years, we found that the perceived risk [of mass smuggling of consumers goods from the US] seemed to be overstated.”

Customs officers had inspected 6,756 passengers arriving on 635 flights during the period, with almost 4,600 items of baggage searched. Mr Daly said such inspections had resulted in only 108 cases of passengers exceeding their duty limits, with a combined value of €88,347.

In contrast, customs officers at the same airports during the same period seized more than €1.9m worth of drugs and €8.7m worth of illegal cigarettes with a potential loss to the exchequer of €2.4m.

While not underestimating the potential for exploitation of shopping limits, Mr Daly said the issue had to be kept in perspective. The committee heard that VAT and duty on children’s clothing worth €900 would result in only €12 in unpaid taxes due to other exemptions.

Mr Daly predicted that the issue was likely to diminish in the future as there were EU proposals to increase the personal limit on goods to €430 for air and sea passengers and €300 for cross-border tourists.

He also pointed out that chaos would result if customs officers attempted to “blanket-check” every person arriving on a flight from the US.

The tax authorities had also sought to inform the public of their personal limits by issuing information leaflets to outbound passengers.

The Revenue chairman said he could not explain how the business organisation ISME had recently estimated that €300m was lost annually to the exchequer as a result of the smuggling of personal items.

The Comptroller & Auditor General, John Purcell, told the committee that the minimum level of customs controls had been applied to travellers from countries outside the EU in recent years, despite anecdotal evidence that many were bringing in goods in excess of their personal limits.

Mr Purcell complained that the tax authorities had only made “a token effort” to inspect such air travellers during 2006. However, the CAG acknowledged that the Revenue had improved its level of customs controls during the recent pre-Christmas holiday season.

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