Enda Kenny (Mayo, Fine Gael) | Oireachtas source

This resolution provides for excise duty increases on tobacco products with effect from midnight. The increase amounts to 40 cent, inclusive of VAT, on a pack of 20 cigarettes in the most popular price category together with pro rataincreases for other tobacco products, with an additional 20 cent increase on a 25g pouch of roll your own tobacco. The price of a pack of 20 cigarettes in the most popular price category, assuming the increase is passed through to the final retail price, will increase to €10. The excise duty component of this price will be €6, and the total tax, inclusive of VAT, will be €7.87, which represents nearly 79% of the price.

The price and tax component of cigarettes in Ireland is among the highest in the EU. The high rates of tax prevailing here reflect the long-standing commitment of successive Governments to use taxation as an instrument to discourage smoking, especially among younger people. These increases will ensure the tobacco tax continues to play an important role in discouraging consumption of tobacco products.

The quantity of roll your own tobacco consumed in Ireland has nearly tripled since 2008, although it still represents a relatively small percentage of the tobacco smoked in Ireland. The additional increase in the tax on roll your own will bring the tax on that product more in line with that on cigarettes.

The Government recognises that high prices and taxes make Ireland an attractive location for tobacco smugglers. The Revenue Commissioners are very conscious of the threat this poses to legitimate business and to the Exchequer and have achieved considerable successes against the illicit trade in tobacco products over recent years. One measure of their success is the reduction in the amount of illicit cigarettes consumed in Ireland, from 15% of the total consumed in 2009 to 11% of the total in 2013. The Revenue Commissioners will continue to make tackling the trade in illicit tobacco products a key objective and the Government will ensure all legislative action necessary to combat the illicit tobacco trade is taken. The measure is estimated to yield €6 million in 2014 and €53 million in a full year.

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