DUBLIN: Illicit trade costs the Irish economy an estimated EUR788m (USD897.6m) in lost tax revenues every year, according to research by professional services firm Grant Thornton.
Releasing “Illicit Trade 2015-2016: Implications for the Irish economy,” Brendan Foster, Partner at Grant Thornton, said: “The level of illicit activity reported is quite remarkable. While we welcome the increased efforts to improve legislation and enforcement activity over the past few years, it is vital that all sectors impacted continue to invest in public awareness campaigns to remind consumers that illicit activity is far from being a victimless crime.”
The report put the loss to the Exchequer at EUR788m in tax revenues, with a further EUR1.5bn loss to retailers and intellectual property holders. The total impact of illicit trade was therefore calculated at EUR2.3bn.
Grant Thornton said that the introduction of a carbon tax on the solid fuel sector has driven a boom for smuggling coal across the border from Northern Ireland. Northern Ireland has no carbon tax regime and imposes a lower value-added tax (VAT) on these products. The report also calculated that digital piracy costs the Exchequer EUR71m in VAT receipts each year, while the loss in corporation tax revenues from illicit activity in the pharmaceuticals sector is estimated at EUR43m.
