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Black market cigarette trade on the increase

CIGARETTE-smuggling continues to soar in Ireland, with new Department of Finance figures showing that tobacco excise tax receipts are falling dramatically short of targets, even though taxes have increased and the number of people smoking has remained constant at 29 per cent of the population.

What Fianna Fail TD Niall Collins called "Premiership-style criminality" is behind the latest upsurge in smuggling, which is costing the state hundreds of millions in lost revenue.

Criminal gangs are openly selling smuggled cigarettes on the streets of central Dublin and other cities, door to door and at fairs and markets. Counterfeit cigarettes can be brought to the Irish market at a cost of just 20 cents a pack and sold on the black market at €4.50. The average selling price of legitimate cigarettes is €9.20 a pack.

Representatives of the country's newsagents told an Oireachtas Committee on Justice, Defence and Equality last week that the two mobile X-ray scanners operated by Revenue Customs officers were not enough.

"Criminals play a game with them," said National Federation of Retails Newsagents (NFRA) president Joe Sweeney told the committee. "They watch where they are and where they are moving to."

Ireland has the most expensive cigarettes in the European Union, meaning that smugglers can make big profits by offering them at cheaper prices. Retailers estimate that over 20 per cent of the cigarettes smoked in the country contribute no tax to the State.

"A survey in respect of 2011 carried out for the Revenue Commissioners and Health Services Executive found that some 770 million illicit cigarettes were consumed in the State," said Finance Minister Michael Noonan last week in reply to a parliamentary question from Fine Gael TD Eoghan Murphy. "This would indicate a loss of the order of €258m in excise duty and Vat, in that year."

Former PSNI assistant chief constable Peter Sheridan has warned that EU and Irish government proposals for the introduction of plain packaging for cigarettes could result in "significant opportunities" for terrorist organisations such as the Real and Dissident IRA.

"Experienced smugglers and counterfeiters like the Real IRA and other paramilitary groups always look at the potential that controls in the legal market have for expanding their already very large illegal market," he said last week. Instead of having to copy hundreds of different cigarette pack styles, they will just have to copy one style.

The extra measures proposed by the Newsagents Federation to tackle the illegal trade include: more mobile scanners for Revenue, ideally one in every port; a minimum fine of €10,000 for illegal trading; criminalising buyers of illegal cigarettes; and increasing Revenue and garda resources, financed by the tobacco industry, to tackle the smugglers.

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According to Revenue, its surveys with the Office of Tobacco Control have consistently found that the sale of illicit product amounts to 15 per cent of all cigarette sales while the balance of the 20 per cent are brought in legitimately but not taxed here.

The results of a 2012 survey are due to be published shortly and will show the same result.

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