Industry claims no tax paid on one in three cigarettes in Limerick

Mike Dwane

Reporter:

Mike Dwane

NO duty is paid to the Irish government on almost one in three cigarettes smoked in Limerick, according to research conducted for tobacco companies.

NO duty is paid to the Irish government on almost one in three cigarettes smoked in Limerick, according to research conducted for tobacco companies.

This means Limerick ranks third of 22 towns surveyed for the Irish Tobacco Manufacturers Advisory Committee (ITMAC). The study assessed the prevalence of non-Irish duty paid (NIDP) product by collecting discarded packs over two periods last year.

Increasing excise on tobacco allied with what they describe as “paltry” court fines for smugglers and illegal sellers means Ireland has become a “haven” for this type of crime, according to ITMAC.

Its study found Waterford (33.3%) to have the highest proportion of NIDP cigarettes in the country, followed by Navan (31.7%) and Limerick (31.4%). The national average, they said, was 28.2%.

This is above Revenue’s estimate of 23% NIDP cigarettes in 2011. Of this, 8% were duty-free or legitimate cross-border purchases and 15% were illegal, according to Revenue.

An ITMAC spokesman commented: “There is no great surprise in these figures. We felt that given the large increase that was put on legitimate cigarettes in December 2011, there would be an upsurge in the illegal market and that is exactly what has happened. The shocking reality is that one third of tobacco consumed in Ireland in 2012 completely avoided excise and VAT”.

EU proposals to ban products such as smaller tobacco pouches and menthol cigarettes would only “increase black market sales and decrease legitimate Irish business, simple as that”, the spokesman added. “Ireland continues to be a haven for international crime syndicates who can operate here within the illegal tobacco market on the premise it is low risk, with paltry fines, and high reward, with gangs making over €3 million a week in Ireland.”

But Fianna Fail leader Micheal Martin, who introduced Ireland’s workplace smoking ban in 2004, has rebutted the lobbying of the tobacco trade.

In a recent interview with the Leader, he claimed tobacco companies had managed to increase profit margins while attacking tax increases for stimulating the black market.

“The tobacco industry is very adept at promoting the smuggling argument as a basis for never increasing taxes,” Deputy Martin said. But the “real reason” for the high price was the “unequivocal” conclusion of international research showing it was the single biggest deterrent for young people.

“Remember what the tobacco industry did historically, making sure kids as young as 11 and 12 in the 40s and 50s got hooked - and that’s how they made their money,” Deputy Martin said.