Revenue teams target head shops for on-the-spot inspections

TAX officers are “actively” inspecting head shops, Revenue boss Josephine Feehily has said.

Teams from the “compliance” section of the Revenue Commissioners are conducting unannounced “on the spot” checks at head stores.

This involves a detailed examination of cash registers to determine the real level of business being transacted.

This is then measured against the tax paid by the head shops, to determine if there is any possible tax evasion going on.

Ms Feehily pointed out that compliance inspections in head shops in the first three months of this year had not revealed any significant tax issues.

She told the Irish Examiner that basic checks of 22 head shops had been conducted, which had resulted in up to 11 compliance visits. She said they also visited one supplier of head shop products. “They didn’t find any illegal substances and there were not very significant tax compliance issues, which we are following up,” said Ms Feehily.

Speaking at the publication of the Revenue annual report for 2009, the chairwoman said the inspections were continuing: “We’ll be active in that space for the rest of the year.”

Revenue commissioner Liam Irwin said head shops were a “risk area” and would be among those cash businesses being targeted this year. He said inspectors would talk to staff during on the spot inspections to determine levels of activity and examine the record on cash registers. He said these are “information gathering exercises” which, if necessary, are followed by full audits.

Government ministers, politicians and business people across the country have commented on the level of business head shops are enjoying, particularly in the context of a recession. The number of such shops has jumped from 26 in 2008 to up to 100 now.

The annual report showed there was a 23% rise in the number of drug seizures, from 6,667 in 2008 to 8,215 in 2009. There was a massive drop in the quantity of cocaine seized, but the 2008 figure was skewed by the freak haul of 1.5 tonnes of cocaine off the Cork coast in November of that year.

There was a massive rise in the quantity of heroin seized, from just 200 grams in 2008 to 70kg in 2009.

Ms Feehily said Customs would be keeping a “sharp focus” on cigarette and tobacco smuggling. She said there was a 62% jump in the quantity of smuggled cigarettes confiscated – up from €135 million in 2008 to €218.5m in 2009.

This included the €120m haul at Greenore Port, Co Louth, last October – the largest seizure ever in the EU. The report said 283,000 litres of illegal laundered fuel were seized, compared to 100,000 litres in 2008.

There were 165 convictions for cigarette offences in 2009, compared to 85 in 2008. Some 33 custodial sentences were handed down last year (6 in 2008).