Dáil Éireann Debate, Thursday - 13 October 2022
215. Deputy Colm Burke asked the Minister for Finance if he will give serious consideration to include an amendment in the Finance Bill 2022 which will amend Section 84 of the Finance Act 1996 which currently gives a power to the tobacco manufacturers to set the price which retailers can charge for cigarettes; and if he will make a statement on the matter. [50922/22]
View answerTobacco Products Tax (TPT) legislation is set out in Chapter 3 of Part 2 of the Finance Act 2005 (as amended), which replaced the TPT provisions of Finance Act 1996. I understand that the Deputy is asking about Section 75 of the 2005 Act which legislates for the ascertainment of retail prices of tobacco products, which had previously been dealt with in Section 84 of the earlier Act.
The TPT provisions of Finance Act 2005 are subject to Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco, often referred to as the Tobacco Tax Directive. Article 7 of the Directive sets out that the excise duty on cigarettes shall be made up of two components: an ad valorem portion which is to be calculated using the maximum retail selling price of the product, and a second portion calculated by applying a specific rate of tax per unit of the product. Member States have no scope to alter the specific requirements set out in the Directive regarding the use of maximum retail selling prices in calculating the ad valorem portion of excise duty applying to cigarettes. Article 15 of the Directive states that manufacturers and importers of cigarettes shall be free to determine the maximum retail selling price of cigarettes. Therefore, this approach cannot be changed by a Member State.
Section 75 of Finance Act 2005 provides for the ad valorem (i.e. value based) portion of the TPT to be based on the retail price of the tobacco product. Section 75 also places an obligation on tobacco manufacturers and importers to make a declaration to Revenue detailing the maximum retail selling price for each tobacco product they manufacture or import. This information is required to ensure the ad valorem (i.e. value based) portion of the TPT is calculated correctly. Under Section 79 of the Finance Act 2005 it is an offence for a retailer to present cigarettes for sale for a higher price than that which has been declared to the Revenue Commissioners.
