(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 14 October 2020, by substituting the following for Schedule 2 to that Act (as amended by section 39 of the Finance Act 2019 (No. 45 of 2019)):
Rates of tobacco products tax
(With effect as on and from 14 October 2020)
Description of Product
Rate of Tax
Cigarettes …. .... .... …. …. …. …. ….
Rate of tax at—
(a) except where paragraph (b) applies, €356.39 per thousand together with an amount equal to 10.06 per cent of the price at which the cigarettes are sold by retail, or
(b) €414.24 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 €414.861 per kilogram.
Fine-cut tobacco for the rolling of cigarettes ....
Rate of tax at €399.120 per kilogram.
Other smoking tobacco .... …. …. …. ….
Rate of tax at €287.812 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 packet of 20 cigarettes in the most popular price category, together with pro rata increases for other tobacco products. The price of a packet of 20 cigarettes in the most popular price category, assuming the full increase is passed through to the final retail price, will increase to €14. The excise duty component of this price will be €8.54 and the total tax, inclusive of VAT, will be €10.97, which represents 78.33% of the price of a packet of 20 cigarettes. The pro rata increase on the price of a typical pouch of rolling tobacco will increase by 70 cents to €19.40. The minimum excise duty rate on cigarettes is also increasing so that any pack of 20 that is priced below €11.50 will be subject to excise as if it was priced at €11.50.
Ireland is committed to a policy of high taxation on tobacco to encourage people to quit smoking, particularly younger people. The policy is working. In 2007, 29% of our people were daily smokers. By contrast, the Healthy Ireland Survey figures for 2019 show that the figure has fallen to 14%. Increasing tobacco products taxation is a key public health policy measure to continue this downward trend in smoking rates in Ireland and help us 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 contribute €57 million in a full year.