Paul McAuliffe
Question:144. Deputy Paul McAuliffe asked the Minister for Finance for an update on the Government’s plan to introduce a domestic tax on e-cigarettes or vapes; and if he will make a statement on the matter. [51535/23]
View answerThursday, 23 November 2023
Questions (144)
Written answers
As the Deputy will be aware, I announced in my Budget 2024 speech the intention to introduce a domestic tax on e-cigarettes and vaping products as part of next year’s Budget.
In light of public health interests, continuing delays to the revision of the Tobacco Products Tax EU Directive and the Programme for Government commitment to tax e-cigarettes and vapes, I instructed my officials to begin scoping the introduction of a domestic tax regime for these products. Considerable preparatory work will need to be undertaken by my Department and the Revenue Commissioners in drafting the legislation to underpin this tax and this work has begun. It is fundamental that definitions of e-cigarette products included in excise legislation are clear and explicit, so as not to allow for any ambiguity. It is proposed that definitions of these products, for tax purposes, will be introduced in Finance Bill 2024, after which time the administration and tax collection systems can be established.
E-cigarettes consist in principle of two main components: the device itself and the consumable e-liquid that is vaporised. The e-liquid contained in these products will be the basis of taxation.
Most excise taxes in Ireland are governed by EU legislation and this helps to reduce compliance and administrative costs. As e-cigarettes are not harmonised excisable products, the Revenue Commissioners will be unable to use existing movement controls and tax warehousing for tax collection purposes. A domestic tax will require significant IT, administrative, control and compliance costs. While the implementation environment is challenging, it does not undermine the intention to apply a tax as one tool in the overall public health policy approach to e-cigarettes.
The Department of Health and the Department of the Environment, Climate and Communications are also drafting their own legislation and policies in relation to e-cigarettes. The Department of Finance has liaised with both departments in relation to the regulation of e-cigarettes and related products and will continue to work with them in order to align appropriately our respective positions. A whole of Government approach to the regulation and taxation of e-cigarettes and vapes is fundamental.