Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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205. To ask the Minister for Finance in relation to the excise on e-liquid commencing on 1 November 2025, the expected annual revenue, the assumptions used on price elasticity and switching to illicit supply; the schedule of evaluation to assess impacts on smoking and vaping prevalence by age cohort; the ring-fencing of proceeds for cessation supports; and if he will make a statement on the matter. [60766/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The E-liquid Products Tax (EPT), legislated for in Chapter 1 of Part 2 of the Finance Act 2024, has commenced as of 1 November 2025. Under the new law, EPT will apply to both nicotine-containing and non-nicotine-containing e-liquid products at a flat rate of €0.50 per millilitre.

Based on the limited information available on the e-cigarette market size in Ireland, the prevalence of e-cigarette products, and the experiences of other Member States in administering a domestic tax on e-liquid products, a conservative estimate of €17 million was derived as the potential 2026 full-year yield for the EPT. The projected tax yield was purposely set at a lower level to avoid overestimating revenues in the early stages of implementation of the tax. As with the introduction of any new excise tax, changing market dynamics and a shift in consumer behaviour may impact potential revenues. Once the tax base for e-liquids has been established, more accurate future yields may be determined.

The popularity of e-liquid products among young people is a primary public health concern, particularly due to the gateway effect these products can have in relation to the uptake of other nicotine or tobacco containing products. The EPT will help to make these products less affordable and accessible for young people. Given that young people tend to be more price sensitive, the EPT is likely to have a more notable impact on usage levels among this age cohort.

The EPT aligns with measures implemented across a number of EU Member States and proposed as part of the revision of the EU Tobacco Tax Directive. It also complements work being done by my colleague, the Minister for Health, to further regulate e-liquid products.

The prevalence of the use of both tobacco products and nicotine inhaling products, such as e-cigarettes, is monitored by both the Department of Health and the HSE, using various types of surveys. Most notably, the Healthy Ireland Survey monitors a number of lifestyle indicators among people aged 15 years and older in Ireland, including e-cigarette usage. Additionally, the HSE's Smoking Prevalence tracker survey has been carried out quarterly since 2002, monitoring prevalence among Irish adults aged 15 years and over, again including e-cigarette usage. The findings of these and other surveys are monitored by the Department of Health. The Public Health (Nicotine Inhaling Products) Bill intends to include provisions to monitor the impact of any restrictions on vaping and smoking among both young people and adults.

The Deputy should note that with limited exceptions, hypothecation is not a feature of the Irish tax system as it reduces the flexibility of the Government to prioritise and allocate funds as necessary at a particular time. However, Section 3 of the Appropriation Act 1999, as amended, provides for a tobacco levy to be paid to the Minister for Health by the Revenue Commissioners. This sum represents an appropriation-in-aid of the grant in the year concerned for the services and purposes connected with the performance by the Minister for Health of her functions. The sum is paid out of moneys collected by the Revenue Commissioners in respect of the duty of excise imposed on tobacco products. The amount sent to the Department of Health under this levy was €167.6 million in 2024.

Funding for the HSE’s QUIT Programme has increased significantly over the past three years, from €13 million in 2021 to €21 million in 2024. This funding has enabled increased investment in smoking cessation services and the introduction of free Nicotine Replacement Therapy in 2022.