Dáil Éireann debate -
Tuesday, 27 Sep 2022

Vol. 1026 No. 6

Financial Resolution No. 3: Tobacco Products Tax

Minister for Health (Deputy Stephen Donnelly)

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 28 September 2022, by substituting the following for Schedule 2 to that Act (as amended by section 40 of the Finance Act 2021 (No. 45 of 2021)):

“SCHEDULE 2

RATES OF TOBACCO PRODUCTS TAX

(With effect as on and from 28 September 2022)

Description of Product	Rate of Tax
Cigarettes …. .... .... …. ....	Rate of tax at­— (a) except where paragraph (b) applies, €402.32 per thousand together with an amount equal to 8.73 per cent of the price at which the cigarettes are sold by retail, or (b) €452.52 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 €454.071 per kilogram.
Fine-cut tobacco for the rolling of cigarettes …. .... .... …. .... ....	Rate of tax at €436.842 per kilogram.
Other smoking tobacco …. .... ....	Rate of tax at €315.014 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).

This resolution 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 €15.80. The excise duty component of this price will be €9.43 and the total tax inclusive of VAT will be €12.38. This represents 78% of the price of a packet of 20 cigarettes. The pro rata increase on the price of a typical pouch of roll-your-own tobacco will increase by 69 cent to a price of €22.69.

Ireland is committed to a policy of high taxation on tobacco. We are committed to this in order to encourage people to quit smoking, particularly younger people, and so they do not start smart smoking in the first place. I am delighted to say the policy is working. In 2007, 29% of people in Ireland were daily smokers. By contrast, the latest Healthy Ireland figures for 2021 show that the figure has dropped to 16%. The initiatives of taxation and other public health measures are working. Increasing tobacco product taxation is an important public health policy measure to continue this downward trend in smoking in Ireland. Our objective is to have a tobacco-free Ireland by 2025.

With regard to raising revenue, the increase in tobacco product tax and the minimum excise duty is estimated to contribute €54.3 million in a full year. I see this resolution as an important part of the Government's policy to encourage people to give up smoking or, indeed, not start smoking in the first place.

An Leas-Cheann Comhairle

I ask Members to keep an eye on the clock, out of courtesy for each other.

Deputy Michael McNamara

I have no doubt the Minister is correct when he talks about the ill effects of smoking and the necessity of reducing the number of people who smoke. However, at what point does increasing the tax become counterproductive due to the use of imported tobacco? The higher the tax, the more lucrative smuggling tobacco becomes and the more that money falls into the hands of criminal gangs rather than local shopkeepers. It is simply a question. At what point does the Minister think it is unrealistic? We have one of the higher levels of taxation in the European Union. We have had that for some time and it is having effects, if the statistics the Minister quotes are correct. I am not suggesting that he did not quote them correctly but I would be interested to know where they are from. Is there a Government policy around making sure we do not have more tobacco sales by illicit sellers of tobacco? The Minister probably does not have these figures off the top of his head but does he know the number of people who are vaping daily? While vaping might not be quite as damaging as smoking cigarettes, it has a lot of negative health effects too. Many people seem to have transferred the habit without necessarily kicking the nicotine addiction. They are just getting it elsewhere. I will allow time for colleagues.

Deputy Richard Boyd Barrett

People Before Profit opposes this increase, as we have opposed it every year, because it is yet another form of regressive charge. We are very much in favour of promoting and encouraging and, indeed, financing public health education about the dangers of smoking. It undoubtedly make you sick and ill and it kills you in many cases, if not most, eventually. It is dangerous and we want far fewer people to smoke. Ideally, it would be great if nobody smoked. There is not a shadow of a doubt about that. However, I am not entirely sure if the Minister's statistics reveal that it is the huge amounts of tax that have been imposed each year on cigarettes that have resulted in fewer people smoking, which I welcome. Is it not just public education generally about the harms and dangers of smoking? I would like to hear a little more to back up that assertion. The problem is this is punishing people who have an addiction. Often they are people who are older or from lower income brackets and so on, and this hits them when they have an addiction they cannot get rid of and financially punishes them. While we want to encourage people to give up smoking, we should give them supports to get off it. We should give them the nicotine patches for free and whatever is necessary to encourage people to move away from smoking but I do not believe imposing a punitive financial penalty on people for being addicted to this substance is the right way to approach it. I think it is regressive and unfair, as does People Before Profit.

Deputy Danny Healy-Rae

I am against a tax increase on cigarettes again this year. I would much prefer that more money be spent on education and ensuring our young population does not start smoking. I know smoking is bad for people but I worry about two things when it comes to increasing the tax on cigarettes for people who are addicted.

Many of them would tell you that they have no other diversion but smoking their cigarettes at a certain time of the day or night. The price is hurting them. The price of everything has gone up. There is another 50 cent increase this year. People were resigned to the fact that it was going to happen, but I think it was the wrong way to go. It is hurting people who have problems with depression. They treat it as their bit of enjoyment or diversion. More and more people smoke outside their own doors, never mind public places, where they have to go outside anyway. We see people smoking outside their own homes even in secluded places. They may even be the only one in the house. They have retained the habit from public places and they smoke outside. They feel justified after their hard day of work, or whatever disappointment or enjoyment they may have had during the day, and need to smoke the cigarettes.

The other thing that I worry about is that young people will find them too expensive and they will go for some other diversion, such as smoking cannabis, which would lead them to taking drugs. That would be much worse than the cigarettes. We know the scourge of drugs and the problems that they create even in rural communities, small country villages and towns. The question people are asked is, "Do you want a bit of stuff?" I am sad to see that. We all know that cigarettes are bad and affect people's health, but sadly people got addicted over the years and cannot give them up. I worry that young people may go a different way and find a cheaper alternative in the drugs, which may be more expensive in the long run. Those are my two reasons for opposing the increase on cigarettes.

Deputy Michael Collins

I will oppose the increased price of cigarettes. I do not smoke myself. I agree with the Minister that they have ill effects. I will not in any way, shape or form deny that, but I have much sympathy for a majority of my constituents who smoke and regularly speak to me about it. They are upset at times when the prices go up. They are not able to come off them. They have tried different ways. I know many people close to me smoked. They tell me how difficult it is to kick the habit. I do not think increasing the price has worked for many of them. One often hears of people who are successful if they use patches or such. I try to advise people to do that and will continue to do so, but this is a bit unfair to those who cannot do that or find that their only bit of comfort is a cigarette. Some people are living on their own and it is a comfort to them.

As Deputy Danny Healy-Rae said, as the price keeps being put up, the illegal trade may be worth looking at, whether it is illegal cigarettes being brought into the country or things that are stronger than cigarettes, which I would not agree with under any circumstances. I know that many other people like a smoke. An old lady was living near me once. She was 88 years old. She told me they were trying to get her to give up cigarettes. I said to her not to bother giving them up because she had lived to 88 years of age and she would survive the few cigarettes she was smoking every day.

I know this is a handy way to bring in tax. I wish to God that people who smoke did not smoke, but they do. I do not want us to be a regime that cannot accept that people have comforts. I will not support the price increase on cigarettes.

Deputy Richard O'Donoghue

I am a reformed smoker. I gave up cigarettes because I wanted to give them up and because of my health at the time I gave them up. Taxing people for whom this is their only comfort is not the right thing to do. I will not be in favour of this tax for that reason. This is the only comfort that many people have. They might suffer from a nervous disposition or, as some people said to me, it is their only bit of sanity even though they do not smoke much. This is coming from a reformed smoker. As long as they respect where I am and do not smoke in my area, I am happy. I do not think a tax is the right thing to do at this time, especially when it might be the only comfort that people have. It might keep them away from stronger drugs if they had a cigarette or two.

Deputy Ivana Bacik

We in the Labour Party support this resolution. We support it as a public health measure. The evidence is clear about the deterrent effect that this has on smoking. We can all agree that it is good to see fewer people smoking and to see that direction in public health practice.

Deputy Michael Healy-Rae

When the late Jackie Healy-Rae gave his last interview to Maurice O'Keeffe, he spoke about people who he remembered from long ago. They smoked turf in their pipes. Women in particular did this. They sat down by the fire late at night and smoked turf when they had no tobacco. Smoking means a lot to certain people. Like the Minister and the Government, I would be happier if nobody smoked ever again, but it is the crutch in life for some people. It is what they look forward to. It is the only little luxury that they have. I never voted for an increase in prices. I will not vote for it tonight.

Deputy Catherine Murphy

We will also not oppose this. I am all in favour of education and supports for people trying to give up. They are essential. The Irish Heart Foundation says that this is the single most important healthcare initiative. I wonder how many people have watched somebody die of lung cancer. It is the most grotesque type of death. We need to get people to realise just what damage they are doing to themselves. This measure is about health. It is not about taxation, as far as I am concerned.

Deputy Stephen Donnelly

I thank the Deputies. Some important points have been raised. I might ask the Department to revert to the Deputies with briefing notes. There are some good data on why this is important. I thank the Joint Committee on Health for its recently published pre-legislative scrutiny report on the vaping Bill. We will look to progress that soon too.

Question, "That Financial Resolution No. 2 be agreed to", put and declared carried.