HC Deb 18 May 1999 vol 331 cc335-6W
Ms Lawrence

To ask the Chancellor of the Exchequer what is his latest estimate of the revenue lost to the Exchequer through smuggling of tobacco. [76050]

Dawn Primarolo

In his Budget speech of 9 March, the Chancellor explained that in terms of the turnover of criminals' tobacco smuggling is now a £1½ billion business. That was an assessment by HM Customs and Excise based on their work in progress to monitor the scale of such smuggling (chiefly of cigarettes and hand-rolling tobacco). The provisional results of this work indicate that the total amount of revenue (excise duty and VAT) evaded in 1998 was perhaps around £1.7 billion.

Forms of tobacco duty evasion covered by this assessment include cross-Channel smuggling of cigarettes and hand-rolling tobacco, smuggling by air passengers, diversion frauds and smuggling over very large consignments in freight.

HM Customs and Excise will continue to examine ways of measuring such smuggling, and are discussing with representatives of the tobacco industry ways of improving the methodologies used.

Mr. Whittingdale

To ask the Chancellor of the Exchequer what assessment he has made of the loss of revenue due to illegal imports of tobacco products in 1999–2000, 2000–01 and 2001–02, taking account of his Budget changes. [76569]

Dawn Primarolo

The forecast for tobacco revenue receipts for 1999–2000, published in the March 1999 Financial Statement and Budget Report, is £7 billion. This takes into account a range of factors including smuggling, forestalling behaviour by manufacturers, the affordability of tobacco products, trends in public health awareness, etc.

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