Oireachtas Joint and Select Committees

Wednesday, 6 November 2019

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach

Finance Bill 2019: Committee Stage (Resumed)

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I have a couple questions on the section, the first of which looks backwards. I support the increase in excise on tobacco products. Can the Minister or Revenue indicate whether last year's 50 cent increase delivered the €57 million increase in revenue that was anticipated at the time and if it came in on target? Regardless of which policy we adopt, and I support this change, it is important that it is based on last year's changes having the expected result. I raise this in the context that the Revenue is giving a range for this measure of between €57 million in additional tax revenue and €42 million in revenue losses to the State. We are all well aware of the black market in tobacco products. There is an elasticity in pricing in this area. My first question, therefore, is what additional revenue did the change bring in last year? Second, where does Revenue see the pinch point for tobacco products in a non-Brexit scenario? If Brexit is disregarded, where is the tipping point at which revenue no longer accrues to the State and is lost, given the elasticity of pricing in this area? Third, on Brexit and the conversation the Minister and I had at the previous meeting on duty-free goods, someone can now book a hotel in Manchester, jump on a flight and return with the cigarettes to which he or she is entitled and still be better off after covering the cost of the flight and hotel because the price of tobacco products is significantly less in Manchester than in shops here. There are three issues there. We will discuss taxes and carbon taxes later. The issue here is that we want to do two things, namely, raise revenue and discourage behaviour. There is an argument that if the reduction in revenue is discouraging behaviour, as opposed to driving people into the black market, that is positive. It is important, however, that we get some statistics as to what happened last year before we proceed on the basis of these figures for next year.