Colm Burke (Cork North-Central, Fine Gael)
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378. To ask the Minister for Finance if his Department has assessed the potential impact of the new tax on vapes, to be introduced in budget 2026, on inflation; and if he will make a statement on the matter. [10559/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Legislation for E-Liquid Products Tax (EPT) was enacted in Finance Act 2024 and is subject to commencement by Ministerial Order. I expect to commence EPT later this year. This allows Revenue the necessary time to set up the information technology, administrative, operational and compliance systems and processes required to administer and collect the new tax.

Under the new law, EPT will apply to both nicotine-containing and non-nicotine-containing e-liquid products. This is in line with the approach taken in most other EU Member States and limits the administrative and operational difficulties for tax authorities given potential tax avoidance concerns. The tax will apply at a flat rate of €0.50 per millilitre. As the tax will be based on the volume of e-liquid, there will be no differentiation in the rate applied amongst single-use, disposable vapes and refillable cartridges.

Similar to the approach for other national excises, the taxing point will be the first supply of e-liquid product in the State and the tax will follow Revenue’s standard model of self-assessment. Suppliers of e-liquid product will be required to register with Revenue in advance of making a first supply of e-liquid products in the State. These suppliers will be liable to account for and pay the tax.

The primary purpose of the EPT is to address public health concerns and to account for the negative externalities created by the consumption of such products. Ireland’s specific tax per millilitre is in line with the taxation approach adopted in several other EU Member States.

As is the case with the introduction of any new tax, my department examined the VAT inclusive impact of this tax on the products concerned. The Department also undertook a distributional analysis of the overall tax and welfare package of Budget 2025. This analysis is contained in the Budget 2025 publication, Beyond GDP - Quality of Life Assessment, which is available online at www.budget.gov.ie. Overall the analysis shows that the combined impact of tax and welfare measures in Budget 2025 is progressive with households, in net terms, experiencing an average gain in weekly disposable equivalised income of 2.3 per cent.

With regard to general inflation, there has been a significant easing of pressure over the last year or so. Inflation in February stood at 1.3%, one of the lowest rates of inflation amongst euro area countries. The reduction in inflation from the almost double digit figures of a few years ago shows that our policies both here at home and in Europe are working.