Ireland's Department of Finance has determined that one in seven cigarettes smoked has been illegally smuggled into the country, reports TheJournal.ie.
Figures for 2010 show that nearly 14 percent of cigarettes are smuggled said Minister for Finance Michael Noonan.
This causes the Exchequer to lose out on around €250 million every year. This figure is roughly half the amount recently cut from the social welfare budget in the Irish government's latest austerity measures.
A further six percent of cigarettes are not tax because they are brought into Ireland legally by people returning from their travels abroad.
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Minister Noonan has said that the illegal tobacco trade was a "high priority" for the Revenue Commissioners, and that customs officers' numerous 'blitz' operations against the trade since 2010 have resulted in the seizure of more than 24 million cigarettes and 1,383 kg of tobacco.
Baggage, postal packages, cargo and vehicles are routinely screened.
In the latest Budget, the price of a pack of 20 cigarettes increased by 25 cent. Retailers Against Smuggling, a lobby group, warned that the price hike would push more customers towards the illegal trade.
“The fall in prices in the illegal market shows that it is growing. If there is any excise increase consumers will be pushed towards street corners and demand in the black market will sky rocket," said spokesperson Benny Gilsenan.