Colm Burke (Cork North-Central, Fine Gael)
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377. To ask the Minister for Finance if he will provide an update in relation to the timing for the publication of the EU Tobacco Excise Directive, originally scheduled for December 2022; the reason for the delay; and if he will make a statement on the matter. [10558/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Across the EU, the taxation of tobacco products is governed by the Tobacco Products Tax Directive (2011/64/EU) which sets out EU rules on the structure and rates of excise duty applied to manufactured tobacco. The Directive defines and classifies various manufactured tobacco products according to their characteristics and lays down the relevant minimum rates of excise duty to be applied by Member States for the different types of products. The Directive aims to ensure the proper functioning of the internal market and a high level of health protection, while also deterring tax fraud, tax evasion and illegal cross-border shopping.

Every four years, the European Commission is required to submit a report to the Council on the rates and the structure of excise duties, accompanied, where appropriate, by a proposal for the revision of the Directive. In 2021, the Commission and Council concluded that an upgrade of the EU regulatory framework was needed in order to tackle current and future challenges to the functioning of the internal market by harmonising definitions and tax treatment of novel products (such as liquids for e-cigarettes and heated tobacco products, including products that substitute for tobacco), and avoid legal uncertainty and regulatory disparities in the EU. They concluded that revision of the EU regulatory framework could also address the issue of tax-induced substitution across products and enable further measures to combat the illicit trade in tobacco to address tax control, revenue collection and health protection issues. A review of the Directive, including proposals for revision of EU minimum tax rates and the inclusion of new products was expected to be published by the Commission in December 2022.

However, such review and reform proposals is still awaited and, in light of this continuing delay, in December 2024 my Department, along with similar authorities in fifteen other Member States made a joint statement calling on the new Commission to make the modernisation of tobacco taxation legislation a key priority for its upcoming term, and to present its proposal for legislative action no later than spring 2025.

I believe that it is very important that the Tobacco Tax Directive is updated to reflect the changing nature of the market and the products on it. I also believe that minimum rates should be increased as part of any review as a means of reducing the high levels of non-Irish duty paid products being brought into the State legally through Duty Free.

While a revision of the Tobacco Tax Directive has not been included in the Commission 2025 workplan, this is a matter which Ireland and other Member States actively continue to pursue.