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Illegal trade operations result in revenue loss for lawful companies because they sell smuggled cigarettes and unlicensed goods, which makes their legitimate products more expensive through taxation

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Margaret Hodge said: The department [HMRC] has also failed to challenge properly those UK tobacco manufacturers who do not do enough to tackle avoidance of UK tax by supplying more of their products to European countries than the legitimate market. HMRC did plan to launch a new project to combat manufactures for over-supplying tobacco products to high-risk