§ Mr. RedmondTo ask the Chancellor of the Exchequer what is his estimate of the loss of(a) excise and (b) VAT revenue during the last 12 months due to consumers crossing the English channel to avoid United Kingdom taxation on (i) alcohol, (ii) cigarettes and tobacco and (iii) perfumes; what is the equivalent figure for the previous 12 months; and if he will make a statement. [2787]
§ Mr. OppenheimCustoms' latest estimate of excise duty and VAT revenues lost from legitimate personal importation of duty-paid alcohol and tobacco products is for the calendar year 1995, and is given in the table. Equivalent figures for calendar year 1994 are given in brackets.
Revenue losses from cross-border shopping £ million Product type Excise duty VAT Total revenue Alcohol products 145 (145) 65 (60) 210 (205) Tobacco products 65 (55) 15 (15) 80 (70) Total 210 (200) 80 (75) 290 (275) Figures have been independently rounded to £5 million. Figures assume that 50 per cent. of alcohol purchased is additional consumption.
Customs' estimate of revenue evasion through smuggling of alcohol and tobacco products, excluding any losses from commercial fraud, is set out in the table. The actual loss to the Exchequer will be less than the amount of revenue evaded, as some smuggling is likely to represent additional consumption, rather than substituting for similar goods bought in the UK. There was no previous official estimate of revenue evaded through smuggling.
Revenue evaded through smuggling £ million Product type Excise duty VAT Total revenue Alcohol products 145 65 210 Tobacco products 445 115 560 Total 590 180 770 Figures have been independently rounded to £5 million.
There is no official estimate of revenue losses from cross-border shopping in perfumes.