The Home Affairs Committee has launched an inquiry into tobacco smuggling and the trade in illicit tobacco.

It comes just weeks after MPs questioned the chief executive of HM Revenue and Customs (HMRC) and the director general of the UK Border Force on their failures to meet key operational targets.

According to a report published by the National Audit Office in June, HMRC had failed to meet key targets for clamping down on the UK’s illicit tobacco trade in 2012/13, and now was unlikely to achieve its goal of preventing more than £1.4bn in revenue being lost to the illicit trade.

The inquiry will explore the reasons for these failures, and consider what should be done to disrupt the UK’s illegal tobacco trade going forward.

It will also question whether the current sanctions and penalties for tobacco smuggling are appropriate, as well as the impact of plain packaging in Ireland on the availability of illegal tobacco in the UK, and the relationship between tobacco smuggling and organised crime.

Committee chair Keith Vaz MP said: “Tobacco smuggling is a significant threat to UK tax revenues and to public health. Yet duty is evaded on nearly one cigarette in ten, and more than a third of all hand-rolling tobacco. This is costing the taxpayer nearly £2bn per year.

“The UK has one of the highest rates of tobacco duty in the EU, which makes it one of the most lucrative markets for smugglers. The role of theBorder Force is therefore vital in reducing the supply of illicit tobacco. We will be looking at the scale of the problem and what more can be done to tackle it.” 

The Committee is inviting written submissions on these issues by August 29.