I move:
(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 13 October 2021, by substituting the following for Schedule 2 to that Act (as amended by section 26 of the Finance Act 2020 (No. 26 of 2020)):
“SCHEDULE 2
Rates of Tobacco Products Tax
(With effect as on and from 13 October 2021)
Description of Product |
Rate of Tax |
Cigarettes …. .... .... …. …. …. …. …. |
Rate of tax at — (a) except where paragraph (b) applies, €383.42 per thousand together with an amount equal to 8.83 per cent of the price at which the cigarettes are sold by retail, or (b) €434.19 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 €434.496 per kilogram. |
Fine-cut tobacco for the rolling of cigarettes .... |
Rate of tax at €418.010 per kilogram. |
Other smoking tobacco .... …. …. …. …. |
Rate of tax at €301.434 per kilogram. |
”.
(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 in other tobacco products. The price of a pack of 20 cigarettes in the most popular pricing category, assuming the full increase is passed through to the final retail price, will increase to €15. The excise duty component of this price will be €8.99 and the total tax, inclusive of VAT, will be €11.80, which represents 78.65% of the price of a pack of 20 cigarettes. The pro rata increase on the price of a typical pouch of roll-your-own will increase by 70 cent to €21.20.
Ireland has been committed to a policy of taxing tobacco in order to encourage people to quit smoking, particularly younger people. Indeed, the policy is to encourage them not to start at all. The policy is working. In 2007, nearly 30% of people were daily smokers. By 2019, that figure had fallen to 14% and figures for younger people are lower still. Increasing tobacco products taxation is a significant public health policy measure to continue this downward trend in smoking rates in Ireland and help us to achieve a tobacco-free Ireland by 2025. In terms of revenue raising, the increase in tobacco products tax and the minimum excise duty is estimated to yield €56.4 million in a full year.