Dáil Éireann Debate, Tuesday - 3 November 2015
310. Deputy Billy Kelleher asked the Minister for Finance given recent budgetary changes on excise taxes on tobacco products, the minimum price that retailers can charge for a packet of 20 cigarettes and a packet of fine tobacco for the rolling of cigarettes; and if he will make a statement on the matter. [37845/15]
View answerEU Directive 2011/64/EU ('the Tobacco Products Tax Directive'), which harmonises the structures and definitions of tobacco products across EU Member States, provides that manufacturers and retailers are free to determine the retail selling price of tobacco products and Member States cannot impose minimum prices. The Directive does allow Member States to impose a minimum excise duty on tobacco products, which in practice puts a floor under retail prices and protects tax revenues.
The minimum excise duty in Ireland currently amounts to €6.15 on a pack of 20 cigarettes; VAT on this excise duty would amount to €1.41, giving a total of €7.56 before any account is made for the trade element in the price and consequential further excise and VAT. The excise duty payable on a 25g pack of roll-your-own tobacco is €7.29; VAT on this excise duty would amount to €1.68, giving a total of €8.97 before any account is made for the trade element in the price and consequential further VAT.
Tobacco companies are obliged to declare to Revenue the maximum retail selling price of cigarettes. No such obligation applies in relation to other tobacco products. The Commissioners inform me that, at present, the lowest maximum price declared for cigarettes range from €8 to €8.50 for 20 cigarettes. Most cigarettes sold in Ireland retail at higher prices and the Budget 2016 tax increases had the effect of increasing the price of cigarettes in the most popular price category by 50 cent to €10.50 per pack of 20.
The high levels of tax have a key influence on the retail price of tobacco products and Ireland has among the highest prices and taxes in respect of tobacco products in the EU. The high rates of tax prevailing here reflect the long-standing commitment by successive Governments to use tobacco taxation to raise the retail price of tobacco as an instrument to discourage smoking, particularly among younger people. The tax and pricing policy is having the desired affect and the Healthy Ireland survey carried out this year for the Department of Health indicates that the number of daily smokers has been reduced to 19% of the adult population.
