Prevention of Revenue Evasion

Cigarette smuggling continued to be a priority in the department's
enforcement effort. In 1997, the department brought 1 616 cases to court
and seized 132.3 million cigarettes with a duty potential of $95 million.

The illegal use of industrial diesel oil has been one of the department's
major challenges and it has strengthened the manpower of the Diesel Oil
Enforcement Division to deal with the syndicates involved. Legislation has
been amended to increase the maximum penalty for offences relating to
the marking and the detreatment of diesel oil marking to two years'
imprisonment and a $200,000 fine - the same level as that for offences
relating to the illegal use of marked oil. The department has also adopted
two new measures against the misuse of marked oil, i.e. to take the
fingerprints of all diesel oil offenders and to seize vehicles involved in
more than one offence. As a result, the number of cases of misuse of
marked oil has dropped significantly. The department has consequently
been able to focus its attention on diesel oil smuggling.

During the year, the department detected 27 smuggled diesel oil cases
compared with four in 1996. Positive results have come from the Oil
Industry Reward Scheme, sponsored by five major oil companies, which
rewards those providing information about illegal diesel oil cases. In 1997,
the department detected 286 illegal filling stations and 14 oil detreatment
plants where markers and colouring substances were removed from
marked oil. In all, 2.2 million litres of diesel oil with a duty potential of
$6.5 million were seized and 1 024 persons were arrested.

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