27 Mar 2015
In a 2013 report, the UK Parliament’s Public Accounts Committee noted “…some UK manufacturers, of hand-rolling tobacco in particular, are greatly over-estimating the size of the legitimate European market for their products and are not co-operating with Her Majesty’s Revenue and Customs (HMRC) to tackle the smuggling of hand-rolling tobacco”.
240 percent over-supply
HMRC estimated that manufacturers’ supply of some brands of hand-rolling tobacco to some countries exceeded legitimate demand by 240 percent in 2011.
On 24 March HMRC announced its revised strategy against the illicit trade in tobacco. It pledged to:
- Create a hostile global environment for tobacco fraud through intelligence-sharing and policy change.
- Undermine the profitability of the fraud at all points in the supply chain, from production to retail.
- Get tougher on those involved, through sanctions.
- Change public perceptions and reduce tolerance of the fraud in the UK.
“Although there are welcome new actions in the updated strategy,” said Deborah Arnott, Chief Executive of ASH, “HMRC still seems far too willing to work collaboratively with the industry, rather than treating them as potential tax avoiders.”
Too close to industry
She noted that HMRC appears to be ready to co-operate with an industry-created system to track and trace cigarettes, called Codentify, which has already been dismissed by FCA and others.
This “threatens to make the industry far too influential in future action on illicit trade,” added Arnott.
Fighting the illicit tobacco trade is the theme of the WHO’s World No Tobacco Day 2015.