John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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42. To ask the Minister for Finance the rationale for the significant increase in excise duty on cigarettes in Budget 2025 given the concerns set out in the Tax Strategy Group paper regarding the scale of illegal trade in tobacco in Ireland and the resultant tax losses to the Exchequer; and if he will make a statement on the matter. [40406/24]

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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43. To ask the Minister for Finance if Budget 2025 contained any additional resource aimed at the detection and enforcement of illegal cigarette smuggling, including for enhanced spot-checks to ensure compliance with duty-free travel allowances for cigarettes; and if he will make a statement on the matter. [40407/24]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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71. To ask the Minister for Finance if, in view of the huge loss to the Exchequer in 2023 due to the highest ever level of illicit cigarettes coming into this State, and taking into account the recent increase in excise on tobacco, he will outline the additional measures that will be implemented to counteract this illegal trade in such products, to protect the revenue due to the State and also legitimate trade; and if he will make a statement on the matter. [40601/24]

Jack Chambers (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 42, 43 and 71 together.

According to the World Health Organization evidence shows that significantly increasing tobacco excise taxes and prices is the single most effective and cost-effective measure for reducing tobacco use. It is also a measure specifically called for in Article 6 of the WHO Framework Convention on Tobacco Control.

Ireland is committed to a policy of high taxation of tobacco in order to encourage people to quit smoking, particularly younger people. The policy rationale of the Budget 2025 increase, and the aim of this Government, is one where an increase in the price of cigarettes will encourage increased cessation attempts in current smokers and reduce smoking initiation amongst younger people and those on lower incomes. This not only achieves our public health objectives, but would also increase the disposable incomes of those who give up smoking.

The HSE offer a number of free programmes and supports to those who wish to stop smoking through the QUIT service. “We Can Quit” is one such free, supportive group programme offered in partnership with local community organisations. Additionally, in February 2023 the HSE announced that a range of nicotine replacement therapies (NRT) will be offered free of charge from local stop smoking clinics. The free NRT is being offered as part of a package of supports to those who wish to quit smoking.

Revenue is committed to targeting the illicit tobacco trade and implements a range of measures to identify and target the smuggling, supply or sale of illicit tobacco, including duty free tobacco in excess of duty-free allowances, and where possible, prosecuting those involved. In its efforts to detect the importation of excess duty-free goods, Revenue uses a combination of risk analysis, profiling, intelligence, screening of checked-in and carry-on baggage and the deployment of its detector dog teams. I have been informed by Revenue of the recent purchase and deployment of an additional mobile baggage scanner, which is being used in conjunction with Revenue’s other resources to help identify illicit products contained in passengers’ baggage. Revenue’s strategy also involves developing and sharing intelligence on a national, EU and international basis. Revenue continues to adopt an agile response to this threat and monitors trends in the illicit tobacco trade on an ongoing basis and adjusts its actions and redeploys its resources in response to new developments or methodologies employed by the criminal gangs involved in that trade.

I am advised that Revenue frequently engages with duty-free operators at the points of entry into the State to discuss the duty-free regime and any additional measures to mitigate against the importation of excess duty-free goods.

The smuggling of tobacco products has a transnational and cross border dimension and in addition to Revenue’s ongoing cooperation with An Garda Síochána in this area, Revenue also works closely with its counterparts in other jurisdictions including colleagues in Northern Ireland through the Cross Border Joint Agency Task Force (JATF) and international bodies including OLAF (the EU’s anti-fraud agency), Europol and the World Customs Organisation.

Revenue optimises media engagement in terms of successful prosecutions, significant seizures and enforcement initiatives, ensuring the general public is aware of the commitment by Revenue to tackling the illicit cigarette and tobacco trade and to deter those involved. To further encourage the general public to engage with Revenue in its efforts targeting the shadow economy and the supply of illegal tobacco products, Revenue includes a message on all press releases relating to tobacco products notifying that businesses or members of the public can contact Revenue in confidence on the free phone number 1800 295 295.

I am pleased to acknowledge that Revenue has achieved considerable success in tackling the illicit tobacco trade. The table below outlines the number and value of seizures of cigarettes and tobacco from 2020 to end September 2024:

2020

In addition, the number of summary convictions and fines related to tobacco offences is outlined in the table below:

Further successes, highlighting Revenue’s approach to the illicit tobacco trade include the detection and dismantling of an illicit commercial cigarette factory in Dublin in February 2024. This detection was as a result of an intelligence-led operation and follow-up investigations are ongoing nationally and internationally.

The Government has ensured through the Finance Acts over the years that Revenue has the necessary statutory powers to tackle the illicit tobacco trade. I am satisfied that the current legislative framework provides an effective basis for undertaking and continuing its important work in this area. I am assured that Revenue is aware of the threat that tobacco smuggling poses to health, to legitimate business interests and to the Exchequer and I commend Revenue and all the relevant State agencies for their work in this important area.

This Government has been consistent in its strong support for ensuring that Revenue has the necessary resources to fulfil its mandate in respect of functions that are critical for its effective functioning as a tax and customs administration.