I move Financial Resolution No. 1:
(1) THAT in this Resolution—
"the Act of 1977" means the Finance (Excise Duty on Tobacco Products) Act, 1977 (No. 32 of 1977);
"cigarettes", "cigars", "fine-cut tobacco for the rolling of cigarettes" and "other smoking tobacco" have the same meanings as they have in the Act of 1977, as amended by the Imposition of Duties (No. 243) (Excise Duty on Tobacco Products) Order, 1979 (S.I. No. 296 of 1979), and by Regulation 26 and Regulation 29 of the European Communities (Customs and Excise) Regulations, 1992 (S.I. No. 394 of 1992).
(2) THAT the duty of excise on tobacco products imposed by section 2 of the Act of 1977 shall, in lieu of the several rates specified in the Fourth Schedule to the Finance Act, 1992 (No. 9 of 1992), be charged, levied and paid, as on and from the 25th day of February, 1993, at the several rates specified in the Schedule to this Resolution.
(3) 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).
SCHEDULE
Rates of Excise Duty on Tobacco Products
|
Description of Product |
Rate of Duty |
|
Cigarettes |
£50.59 per thousand together with an amount equal to 16.86 per cent. of the price at which the cigarettes are sold by retail |
|
Cigars |
£78.098 per kilogram |
|
Fine-cut tobacco for the rolling of cigarettes |
£65.903 per kilogram |
|
Other smoking tobacco |
£54.182 per kilogram |
Financial Resolution No. 1 provides for a tax increase of 10p, including VAT, on the packet of 20 cigarettes. The pro rata increases on other tobacco products, except pipe tobaccos, will take effect from midnight tonight. It also sets a single rate for pipe tobacco as required under EC law — in other words the three rates now become one.
The purpose of this resolution is to give effect to a budget day increase of 10p, including VAT, on a packet of 20 cigarettes with pro rata increases on cigars and roll-your-own tobacco and to set a single rate for piped tobaccos. Consumption of cigarettes fell by 26 per cent between 1980 and 1988. The fall was due to a combination of factors including public concern about the health risks posed by cigarette smoking and the relatively high level of taxation. In recent years cigarette consumption has been on the increase. Between 1989 and 1991 consumption grew by 12 per cent, helped no doubt by the absence of a duty increase in the 1990 budget and the lowering of the standard rate of VAT during this period. However, the 16p tax increase imposed in last year's budget seems to have had an impact with the indications being that consumption fell in 1992 by about 4.5 per cent.
On health as well as budgetary grounds there is a strong case for continuing this policy. It is estimated that the effect of this increase, together with trade price increases in late 1992, will be to reduce demand further for cigarettes by something over 1 per cent in 1993. However the increase is not being applied to piped tobacco since the amalgamation of existing piped tobacco rates, based on a weighted average of existing rates, has resulted in a substantial increase in the traditional pipe smoker' hard-pressed tobacco. To have applied the duty increase proposed on a pro rata basis to piped tobaccos would have seen this product, which is generally favoured by older men, particularly harshly hit. Excise duty and receipts from tobacco products amounted to £415 million in 1992.