Dáil Éireann Debate, Thursday - 12 June 2014
57. Deputy Sandra McLellan asked the Minister for Finance the yield to the Exchequer from an increase of 10 cent, 20 cent, 50 cent and 60 cent in the excise duty on 20 cigarettes, and a pro rata increase in excise on other tobacco products; and if he will make a statement on the matter. [25052/14]
View answer59. Deputy Sandra McLellan asked the Minister for Finance if he will provide the annual increases in the retail price of 20 cigarettes since 2001 to date in 2014 in tabular form; and if he will include the pre-budget retail price, the budget tax increase and the proportion of that due to specific tax, ad valorem tax and VAT, the post-budget price, the trade increase and the tax element of the trade increase broken into its constituent parts; and if he will make a statement on the matter. [25054/14]
View answerI propose to take Questions Nos. 57 and 59 together.
I am informed by the Revenue Commissioners that the potential yield from the Duty increases suggested by the Deputy, in a full year including VAT, are as set out in the following table. However, I am further advised by the Commissioners that these estimates are based on the assumption of no change in behaviour by smokers following increase in prices and this is unlikely to be the case.
|
Duty Increase |
Potential Yield * |
|
10c |
€16m |
|
20c |
€31m |
|
50c |
€77m |
|
60c |
€92m |
*Assuming no behavioural change by smokers.
I am informed by the Commissioners that economic research conducted by Revenue has shown that (further) cigarette price rises, particularly at the higher end of the range, are unlikely to increase Excise receipts from the sale of cigarettes (the largest source of Excise Duty on tobacco) and this is supported by experience in recent years. In economic terms, the demand for Irish duty paid cigarettes has moved to become much more elastic in nature, this implies an increase in price will lead to a proportionately larger decrease in consumption of Irish duty paid cigarettes resulting in an overall decrease in cigarette Excise receipts.
The likely reduction in consumption of Irish duty paid cigarettes (and fall in receipts) from higher duty on tobacco will arise from a combination of factors. Some people will reduce their smoking levels; others will simply substitute their consumption to non-Irish duty paid cigarettes. These can be either illicit or legally brought into the country. I am advised by the Revenue Commissioners that the extent of the illicit cigarette market in Ireland is estimated through annual surveys. These surveys are undertaken for Revenue and the National Tobacco Control Office of the Health Services Executive by Ipsos MRBI. The analysis of the results of the survey for 2013 are not yet fully finalised but preliminary analysis indicates that 11% of cigarettes consumed in Ireland in 2013 were illicit and a further 5% of cigarettes were non Irish duty paid which were legally brought into the country. The comparable figures for 2012 and 2011 were 13% and 14% respectively with the legally imported non Irish Duty paid cigarettes at 6% and 7%.
In relation to the second Question, the Revenue Commissioners advise that the annual increases in the retail price of the most popular price category (MPPC) of 20 filter tipped cigarettes since 2001 to end 2013 (the most recent period for which accurate information exists), together with the requested breakdown by tax and trade contents, are shown in the table. A full list of specific dates for trade content changes are not available to the Commissioners but the table shows the increase in each year.
TOBACCO (20 CIGARETTES)
Budget Changes and Trade Increases: Effect on Retail Price Expressed in Cents
|
Year (date of Budget increases indicated) |
MPPC |
Budget Increase |
Trade Increase |
Excise Specific |
Excise Ad Valorem |
Total Excise |
VAT Content |
Total Tax |
Trade Content |
|
2001 |
477.4 |
- |
- |
207.4 |
90.2 |
297.6 |
79.6 |
377.2 |
100.2 |
|
- |
- |
- |
+10.2 |
- |
+1.9 |
+1.9 |
+1.7 |
+3.6 |
+6.5 |
|
- |
487.6 |
- |
- |
207.4 |
92.1 |
299.5 |
81.3 |
380.8 |
106.8 |
|
05-Dec-01 |
- |
+12.7 |
- |
+8.2 |
+2.4 |
+10.6 |
+2.1 |
+12.7 |
- |
|
- |
500.3 |
- |
- |
216.4 |
93.7 |
310.1 |
83.4 |
393.5 |
106.8 |
|
2002 |
500.3 |
- |
- |
216.4 |
93.7 |
310.1 |
86.8 |
396.9 |
103.4 |
|
- |
- |
- |
+20.7 |
- |
+3.9 |
+3.9 |
+3.6 |
+7.5 |
+13.2 |
|
- |
521.0 |
- |
- |
216.4 |
97.6 |
314.0 |
90.4 |
404.4 |
116.6 |
|
04-Dec-02 |
- |
+50.0 |
- |
+32.0 |
+9.3 |
+41.3 |
+8.7 |
+50.0 |
- |
|
- |
571.0 |
- |
- |
249.9 |
105.4 |
355.3 |
99.1 |
454.4 |
116.6 |
|
2003 |
- |
- |
+16.0 |
- |
+3.0 |
+3.0 |
+2.8 |
+5.7 |
+10.3 |
|
- |
587.0 |
- |
- |
249.9 |
108.4 |
358.2 |
101.9 |
460.1 |
126.9 |
|
03-Dec-03 |
- |
+25.0 |
- |
+16.0 |
+4.6 |
+20.7 |
+4.3 |
+25.0 |
- |
|
- |
612.0 |
- |
- |
266.8 |
112.1 |
378.9 |
106.2 |
485.1 |
126.9 |
|
2004 |
- |
- |
+13.0 |
- |
+2.4 |
+2.4 |
+2.3 |
+4.6 |
+8.4 |
|
- |
625.0 |
- |
- |
266.8 |
114.5 |
381.3 |
108.5 |
489.8 |
135.2 |
|
2005 |
- |
- |
+10.0 |
- |
+1.8 |
+1.8 |
+1.7 |
+3.6 |
+6.4 |
|
07-Dec-05 |
635.0 |
- |
- |
266.8 |
116.3 |
383.1 |
110.2 |
493.3 |
141.7 |
|
2006 |
- |
- |
+20.0 |
- |
+3.7 |
+3.7 |
+3.5 |
+7.1 |
+12.9 |
|
- |
655.0 |
- |
- |
266.8 |
120.0 |
386.8 |
113.7 |
500.5 |
154.5 |
|
06-Dec-06 |
- |
+50.0 |
- |
+32.0 |
+9.3 |
+41.3 |
+8.7 |
+50.0 |
- |
|
2006 |
705.0 |
- |
- |
302.7 |
125.3 |
428.1 |
122.4 |
550.4 |
154.6 |
|
2007 |
- |
- |
+10.0 |
- |
+1.8 |
+1.8 |
+1.7 |
+3.5 |
+6.5 |
|
- |
715.0 |
- |
- |
302.7 |
127.1 |
429.9 |
124.1 |
554.0 |
161.0 |
|
05-Dec-07 |
- |
+30.0 |
- |
+19.2 |
+5.6 |
+24.8 |
+5.2 |
+30.0 |
|
|
- |
745.0 |
- |
- |
321.1 |
133.5 |
454.6 |
129.3 |
583.9 |
161.1 |
|
2008 |
- |
- |
+10.0 |
- |
+1.8 |
+1.8 |
+1.7 |
+3.5 |
+6.5 |
|
- |
755.0 |
- |
- |
321.1 |
135.3 |
456.4 |
131.0 |
587.5 |
167.5 |
|
14-Oct-08 |
- |
+50.0 |
- |
+32.0 |
+9.3 |
+41.3 |
+8.7 |
+50.0 |
|
|
- |
805.0 |
- |
- |
350.6 |
147.2 |
497.8 |
139.7 |
637.5 |
167.5 |
|
01-Dec-08 |
- |
+2.7 |
- |
- |
- |
- |
+2.7 |
+2.7 |
- |
|
- |
807.7 |
- |
- |
350.6 |
147.6 |
498.2 |
142.9 |
641.2 |
166.5 |
|
- |
- |
- |
+2.3 |
- |
+0.4 |
+0.4 |
+0.4 |
+0.8 |
+1.5 |
|
- |
810.0 |
- |
- |
350.6 |
148.1 |
498.7 |
143.3 |
642.0 |
168.0 |
|
07-Apr-09 |
- |
+25.0 |
- |
+15.9 |
+4.6 |
+20.6 |
+4.4 |
+25.0 |
- |
|
- |
835.0 |
- |
- |
366.8 |
152.4 |
519.2 |
147.8 |
667.0 |
168.0 |
|
2009 |
- |
- |
+10.0 |
- |
+1.8 |
+1.8 |
+1.8 |
+3.6 |
+6.4 |
|
- |
845.0 |
- |
- |
366.8 |
154.2 |
521.1 |
149.5 |
670.6 |
174.4 |
|
01-Jan-10 |
- |
-3.5 |
- |
- |
- |
- |
-3.5 |
-3.5 |
- |
|
- |
841.5 |
- |
- |
366.8 |
153.6 |
520.4 |
146.0 |
666.5 |
175.1 |
|
2010 |
- |
- |
+13.5 |
- |
+2.5 |
+2.5 |
+2.3 |
+4.8 |
+8.7 |
|
- |
855.0 |
- |
- |
366.8 |
156.0 |
522.9 |
148.4 |
671.3 |
183.7 |
|
2011 |
- |
- |
+10.0 |
- |
+1.8 |
+1.8 |
+1.7 |
+3.6 |
+6.4 |
|
- |
865.0 |
- |
- |
366.8 |
157.9 |
524.7 |
150.1 |
674.8 |
190.2 |
|
06-Dec-11 |
- |
+25.0 |
- |
+16.2 |
+4.5 |
+20.7 |
+4.3 |
+25.0 |
- |
|
- |
890.0 |
- |
- |
384.9 |
160.5 |
545.3 |
154.5 |
699.8 |
190.2 |
|
01-Jan-12 |
- |
+19.3 |
+0.7 |
- |
+3.6 |
+3.7 |
+15.7 |
+19.3 |
+0.7 |
|
- |
910.0 |
- |
- |
384.9 |
164.1 |
549.0 |
170.2 |
719.1 |
190.9 |
|
01-May-12 |
910.0 |
- |
- |
466.2 |
82.3 |
548.5 |
170.2 |
718.6 |
191.4 |
|
- |
- |
- |
+10.0 |
- |
+0.9 |
+0.9 |
+1.9 |
+2.8 |
+7.2 |
|
- |
920.0 |
- |
- |
466.2 |
83.2 |
549.4 |
172.0 |
721.4 |
198.6 |
|
06-Dec-12 |
- |
+10.0 |
- |
+7.2 |
+0.9 |
+8.1 |
+1.9 |
+10.0 |
- |
|
- |
930.0 |
- |
- |
475.4 |
82.1 |
557.5 |
173.9 |
731.4 |
198.6 |
|
2013 |
- |
- |
+10.0 |
- |
+0.9 |
+0.9 |
+1.9 |
+2.8 |
+7.2 |
|
- |
940.0 |
- |
- |
475.4 |
83.0 |
558.4 |
175.8 |
734.2 |
205.8 |
|
15-Oct-13 |
- |
+10.0 |
- |
+7.3 |
+0.9 |
+8.1 |
+1.9 |
+10.0 |
- |
|
- |
950.0 |
- |
- |
483.7 |
82.8 |
566.5 |
177.6 |
744.1 |
205.9 |
Notes:
VAT Rate reduced to 20% on 1-1-01
VAT Rate increased to 21.5% on 1-12-08.
VAT Rate reduced to 21.0% on 1-1-10.
VAT rate increased to 23% on 1-1-12
