THE GOVERNMENT WILL lose over €580 million in VAT and excise to the illegal cigarette market this year according to figures released by the Irish Tobacco Manufacturers Advisory Committee (ITMAC) ahead of next week’s budget.

The figures, which are compiled from the most recent CSO and EU Eurobarometer statistics, show that over 1.6 billion of the cigarettes smoked in Ireland this year will be non Irish duty paid (NIDP) meaning that the Irish economy will lose over €730 million to the illegal tobacco market by the end of the year.

The committee said the statistics also show that the rate of non Irish duty paid (NIDP) cigarettes in Ireland has gone up from 24.5 per cent in 2011 to 28.2 per cent this year.

Of the 28.2 per cent non Irish duty paid tobacco consumed in Ireland, approximately 18.4 per cent of this is illegal. This means that criminals will make over €230 million this year from illegal tobacco in Ireland, or over €640,000 per day according to the ITMAC.

Figures released by the committee today included:

• €736,460,000 – Loss to Irish Economy from illegal tobacco in 2012
• €581,963,500 – Loss to Irish Government from illegal tobacco in 2012
• €1,594,420 – Loss to Irish Government from illegal tobacco per day
• €234,929,247 – Money made by criminals from illegal tobacco in 2012 in Ireland
• €643,642 – Money made by criminals from illegal tobacco per day in Ireland
• €16,818 – Money made by criminals from illegal tobacco per hour in Ireland
• 28.2 per cent is non Irish duty paid in 2012 – 18.4% illegal / 9.6% non Irish duty paid
• 1,601,000,000 – Amount of NIDP cigarettes consumed in Ireland in 2012

A spokesperson said that last year the government increased VAT and excise again and the illegal tobacco market has soared.

“The government is trying to achieve two things, decrease smoking rates and increase revenue from legitimate markets and the statistics show that currently they are achieving neither with the predicted tax take from tobacco down by over €80million and the consumption rate at 29 per cent as it has been for 5 years,” the spokesperson said. “Any increase will make this worse and solve nothing.”

The spokesperson added that illegal cigarettes are available in every town and city across the country with consumers “choosing to pay €4.50 to criminals and contribute to local gangs” rather than pay €9.20 in a local shop and contributing to the Irish economy.

“There is no doubt right now that the criminals are winning hands down and the Government is losing.”