Ireland is an “illegal tobacco haven”, according to the tobacco industry, with no Irish taxes paid on more than one in four cigarettes consumed.
An EU-wide industry survey of “no duty paid” tobacco found Ireland had one of the highest proportions of cigarettes for which duty had not been paid at 28.2 per cent, behind Latvia at 33.7 per cent and Lithuania at 32.4 per cent.
High retail price
The figures include illegal cigarettes and cigarettes brought back by Irish people travelling abroad. The Irish Tobacco Manufacturers Advisory Committee said the high cost of legal cigarettes made Ireland a target for international crime gangs.
“These figures really highlight the reasons why Ireland is so attractive to tobacco smugglers. Along with having a high retail price for legitimate tobacco products, criminals know that they can escape with a small fine in Ireland even if they are caught here. It is fertile ground for international criminal gangs who smuggle tobacco, ” a committee spokesman said.
'Tobacco tourists'
The Government was losing "hundreds of millions" of euro in duty a year from illegal cigarettes and "tobacco tourists", he said.
“Not only are the Government losing hundreds of millions a year but they are helping to furnish criminal gangs with €3 million per week from illegal tobacco.”
However Aisling Corcoran of market research company Ipsos MRBI said budgetary policy had played a "pivotal role" in reducing smoking.
“The largest single annual decline in prevalence rates was 9 per cent between June 2009 and June 2010. The origins of this decline can be traced back to Budget 2009 in which a 50 cent excise duty was added to a pack of cigarettes.”
The company has carried out research on behalf of the National Tobacco Control Office and the Revenue Commissioners. Ms Corcoran said its research did not support the claim that increasing duty encouraged black market trade.
In 2011, 15 per cent of smokers were consuming illegal cigarettes. "This figure has held relatively steady since first benchmarked in 2009 by Ipsos MRBI, " she said.
“Taking the period from 2009 to 2010, when significant increases in excise duty were applied to cigarettes, the research shows that the incidence of smoking illegal cigarettes actually remained statistically unchanged. Significantly, the incidence of illegal cigarette smoking did not rise on foot of the increases in excise duty.”
One of the key measures in the Department of Health’s recently published policy Tobacco Free Ireland is an increase in excise duty over a continuous five-year period.
“This measure makes sense for two reasons; higher prices serve to reduce smoking prevalence rates and higher taxes will be required to make up the shortfall in the revenues generated from excise duty,” Ms Corcoran said.
