Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I move the following Financial Resolution:

(1) THAT for the purposes of the tax charged by virtue of section 72 of the Finance Act 2005 (No. 5 of 2005), that Act be amended, with effect as on and from 12 October 2016, by substituting the following for Schedule 2 to that Act (as amended by section 45 of the Finance Act 2015 (No. 52 of 2015)):

“SCHEDULE 2 RATES OF TOBACCO PRODUCTS TAX

(With effect as on and from 12 October 2016)

Description of Product	Rate of Tax
Cigarettes	Rate of tax at­- (a) except where paragraph (b) applies, €288.22 per thousand together with an amount equal to 9.52 per cent of the price at which the cigarettes are sold by retail, or (b) €325.11 per thousand in respect of cigarettes sold by retail where the rate of tax would be less than that rate had the rate been calculated in accordance with paragraph (a).
Cigars	Rate of tax at €335.368 per kilogram.
Other smoking tobacco	Rate of tax at €310.189 per kilogram. Rate of tax at €232.664 per kilogram.

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(2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Financial Resolution No. 1 provides for excise duty increases on tobacco products with effect from midnight tonight. The increase amounts to 50 cent, inclusive of VAT, on a pack of 20 cigarettes in the most popular price category, together with pro-rata increases for other tobacco products. The price of a pack of cigarettes in the most popular category, assuming the increase is passed through to the final retail price, will increase to €11. The excise duty component of this price will be €6.81 and the total tax inclusive of VAT will be €8.87, which represents nearly 80.6% of the price of a pack.

Ireland is committed to a policy of high taxation of tobacco in order to encourage people to quit smoking, particularly younger people. The policy is working. In 2007, 24% of our people were daily smokers but today Department of Health figures show that the figure has fallen to 19%. Furthermore, the quantity of cigarettes consumed per smoker has also fallen in the period. Increasing tobacco products taxation is a key public health policy measure to continue this downward trend in smoking rates in Ireland and to help us to achieve a tobacco-free Ireland by 2025.

In terms of revenue raising, the increase in excise duty on tobacco products will contribute €5.7 million to the Exchequer in 2016 and €65.2 million in a full year.

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