HMRC estimates that £2.7bn was lost in excise duty due to illicit tobacco and alcohol in the 2013-14 tax year.
The latest HMRC Tax Gaps report also said there had been a £0.1bn reduction in duty lost through illicit alcohol, but a £0.1bn increase in the level of duty lost through illicit tobacco sales.
The Association of Convenience Stores (ACS) responded to the report by calling on the government to introduce the Alcohol Wholesaler Registration Scheme without further delays.
ACS chief executive James Lowman said: “We are encouraged by the reduction in tax gap for alcohol, but this still represents a significant loss in revenue for the Treasury and remains a problem that harms responsible retailers across the country.
“ACS believes that the Alcohol Wholesaler Registration Scheme is an effective way of tackling alcohol duty fraud, and we urge Government to introduce this measure properly in January. We will continue to work with the Joint Alcohol Anti-Fraud Taskforce to look at effective ways of reducing the level of duty fraud in our sector.”