Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Dealing with the forecast that we have, forecasting yields is becoming increasingly difficult, with continued irregularities and fluctuations in tobacco clearances and tax receipts. The impact of increased tobacco products regulation is also a challenge in forecasting yield. I am aware of the possibility that an increase in the price of cigarettes could result in a change in consumer behaviour, with, therefore, less Irish duty paid on tobacco products purchased. Overall, I believe the current forecast that we have is solid. To the extent that forecast receipts are not realised due to a reduction in smoking prevalence, that would be very welcome from a health perspective, which is my overriding policy objective in making this particular decision.

On revenue, it is best for me to answer the question on revenue last year in light of what happened the previous year. In 2017, the forecast yield was €1.2 billion and €1.39 billion was delivered.

There was an over-delivery in 2017 of €175 million. In 2018 we were due to deliver €1.1 billion. A total of €749 million was delivered, meaning that there was an under-delivery of €354 million. A large portion of that is explicable by the over-delivery that we had in the previous year.

On the final point that the Deputy made with regard to purchases of tobacco products outside of this jurisdiction, that is an increasing risk in terms of our forecasts. I engaged in a discussion with my officials on the revenue yield that was delivered to me. I asked if there was a case for picking a figure that is different from the range given. The challenge I met was that if I began picking figures inside a yield range given to me by Revenue, where would I end up? If I begin to use that approach in relation to tobacco, is there not a case to be made for using it in relation to other tax forecasts given to me? I will simply say that this particular decision was driven by health grounds and that was the reason for making it. An issue of which we must be increasingly aware is the degree to which incentives are created for tobacco products to be purchased elsewhere. That is why I always meet any reasonable requests that come to me from Revenue in terms of its resources for compliance measures. Of course, all these risks will be heightened if we end up in a no-deal Brexit scenario.