Fennell Communications Releases

- Hidden economy is a serious threat to retail jobs in Ireland

- 2011: loss of excise duty and VAT from illegal cigarettes - in region of €250M

- 2011: 178 million illegal cigarettes seized nationally

- Music copyright infringement, pirated computer software / DVDs costs Irish economy €63.5M annually

Minister for Small Business, John Perry T.D., called today (Thursday) for consumers to buy their goods and services from legitimate businesses in order to protect Irish jobs: “There were 8,000 fewer small businesses and 105,000 less people employed by small businesses in 2009 than there was in 2007. Over 50,000 jobs have been lost in the retail sector alone since the onset of the crisis and the continued growth of the hidden economy is a serious threat to the 250,000 retail jobs that remain in Ireland.

“As Chair of the Advisory Group for Small Business, I was responsible for launching their first report in November last year which highlighted the damage being caused by undeclared cash for services, where services such as home improvements, waste disposal and gardening for example are provided without VAT being paid.

“According to the Revenue, the loss of excise duty and VAT to the Exchequer from illegal cigarettes in 2011 was in the region of €250 million. As I have mentioned previously, the sale and purchase of illegal cigarettes has an enormous wider impact on small shops, resulting in a loss of footfall which hits other product sales.  Last year, more than 178 million illegal cigarettes were seized by Revenue and Gardaí nationally. The more illegal goods sold and bought in this country, the more difficult it is for small and medium enterprises to grow their business, create jobs and help people off the live register and into employment.

“It must also be remembered that music copyright infringement is estimated by IRMA to cost the Irish economy €3.8 million annually, this figure increases to €63.5 million when pirated computer software and videos/DVD are included. Furthermore, a 2010 report by Pfizer explained that Ireland is the 6th worst country in Europe for activity concerned with counterfeiting medicines and claimed the market for counterfeit medicines in Ireland was worth €86 million per annum.

“A recent Transcrime report published by an international criminologist at the University of Trento in Italy found that proposed legislation in Europe for dealing with the extremely important health objective of tobacco regulation could have the unintended consequence of increasing the illegal tobacco market in Europe. Now more than ever checks and balances must be put in place to protect small businesses in any piece of legislation whether that is from the EU or in Ireland.

“As Minister for Small Business and SME Envoy for Ireland I will continue to work within Government to ensure that the interests of small and medium businesses are at the heart of all discussions concerning Irish or EU legislation that has any direct or indirect impact on small businesses.

“Fuel laundering is another major issue and one that is particularly relevant in my own constituency of Sligo-North Leitrim due to its proximity to the border. Officers from the Revenue's Customs Service and the Gardaí uncovered an oil laundering plant in Co. Cavan on the 27th March 2012 which had the capacity to launder approximately ten million litres of fuel per annum. This one plant could have lost the Exchequer €5 million per annum in taxes.

“Consumers must be vigilant when purchasing goods and services, and understand the negative effects of purchasing illegal goods. The hidden economy is not a victimless crime; its victims are the local shop around the corner or the local tradesman who pays his taxes every year. Buying illegal goods kills jobs and passes on the benefit to organised gangs and paramilitary groups. In order to protect our friends and families jobs, we must say no to illegal goods.”

ENDS

Report of the Advisory Group on Small Business: http://www.forfas.ie/media/Forfas021211-report_of-the_small_business_advisory_group_publication.pdf

Transcrime, Crime proofing the policy options for the revision of the Tobacco Products Directive: http://transcrime.cs.unitn.it/tc/fso/pubblicazioni/AP/Transcrime-CP_of_the_EU_TPD.pdf