(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 10 October 2018, by substituting the following for Schedule 2 to that Act (as amended by section 49 of the Finance Act 2017 (No. 41 of 2017)):
RATES OF TOBACCO PRODUCTS TAX
(With effect as on and from 10 October 2018)
Description of Product
Rate of Tax
Cigarettes …. .... .... …. …. …. …. ….
Rate of tax at—
(a) except where paragraph (b) applies, €327.10 per thousand together with an amount equal to 9.04 per cent of the price at which the cigarettes are sold by retail, or
(b) €376.82 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 €375.058 per kilogram.
Fine-cut tobacco for the rolling of cigarettes ....
Rate of tax at €360.827 per kilogram.
Other smoking tobacco .... …. …. …. ….
Rate of tax at €260.199 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 for other tobacco products as well as an additional 25 cent increase on a 30 gram pack of roll-your-own tobacco.
There will also be an increase in the minimum excise duty on a pack of 20 cigarettes to €7.54. This measure will ensure all cigarette packs, regardless of price, will incur at a minimum the excise duty that would be applicable to a pack priced at €11. The price of a pack of 20 cigarettes in the most popular price category, assuming the full increase is passed through to the final retail price, will increase to €12.70. The excise duty component of this price will be €7.69. The total tax inclusive of VAT will be €10.06, which represents 79% of the price of a pack.
Ireland is proudly committed to a policy of high taxation of tobacco in order to encourage people, particularly younger people, to quit smoking. Thankfully, the policy is working. In 2007, some 24% of our people were daily smokers. By contrast, the HSE and Healthy Ireland survey figures for June of this year showed that figure had fallen to 18%. Furthermore, the quantity of cigarettes consumed per smoker also fell in that period. Increasing taxation on tobacco products is a key public health policy measure to continue this downward trend in smoking rates in Ireland and help us achieve our goal of being tobacco free by 2025. In revenue, the increase in tobacco product tax and the minimum excise duty are estimated to contribute €61.8 million in a full year.