Off-licences say online sellers are dodging high alcohol taxes by labelling drinks 'collectables'

Trade body Noffla wants officials to bring in new rules for offshore vendors.

By Conor McMahon Deputy editor, Fora

THE TRADE BODY that represents Ireland’s off-licences claims that online drinks retailers are dodging high taxes on alcohol by incorrectly labelling items so they go unnoticed by customs officials.

In a pre-budget submission to the Department of Finance, the National Off-Licence Association, or Noffla, said that many online stores based outside of Ireland are selling alcohol directly to consumers here without paying the required excise duty or VAT taxes.

Noffla said this “online tax evasion” is achieved by labelling alcohol shipments as foodstuffs, collectibles, not-for-consumption items or with other commodity codes that could bypass customs checks.

“While many sites do not make explicit reference to the fact they do not pay excise, others suggest their unique position places them outside the remit of domestic taxation,” the trade group said in its submission.

“Such claims include the concept that the container itself is a ‘collectable’ item for sale, irrespective of the contents inside the bottle. Another suggests that the alcoholic contents are not for consumption, thus not liable to excise.”

The association’s government affairs director, Evelyn Jones, told Fora that the body has seen a “big upswing” in this kind of practice and that its members have brought a number of special-offer websites to the attention of Revenue.

She claimed that a rise in tax dodging by online retailers is evident in the number of alcohol products seized by customs officials: in 2016 there were 1,875 seizures of alcohol products compared to just 379 in 2012.

Source: Noffla

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Jones said while the tax authorities have been “very good” at pursuing suspicious vendors, too many discoveries are made “by chance”.

For that reason, Noffla is calling on the Department of Justice to introduce a remote off-trade licence in the upcoming Sale of Alcohol Bill.

Under that proposal, online retailers would be required to obtain a certificate of personal fitness from the justice department and a tax clearance cert from the Revenue Commissioners.

Jones said the licence would be similar to a certificate required by overseas online betting companies to ensure that they’re tax compliant and adhere to Irish regulation.

Elsewhere in its submission, Noffla once again urged the government to reduce excise duty on alcohol by 15%. For example, that would cut the price of the average bottle of wine by about 50c.

It said Ireland is the most expensive country in the European Union to buy alcohol, with prices roughly 175% higher than the EU average.

The group added that the weaker sterling had prompted shoppers to travel to Northern Ireland to take advantage of the more favourable exchange rate.

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