Resolution No. 6—Customs and Excise. - Tobacco.

I move:—

(1) That in this Resolution—

"the Act of 1934" means the Finance Act, 1934 (No. 31 of 1934);

"the Act of 1960" means the Finance Act, 1960 (No. 19 of 1960).

(2) That the duty of customs on tobacco imposed by section 20 of the Finance Act, 1932 (No. 20 of 1932), shall, as on and from the 20th day of April, 1961, be charged, levied and paid at the several rates specified in Part I of the Schedule to this Resolution in lieu of the several rates at which the said duty is now chargeable by virtue of section 19 of the Act of 1960.

(3) That the duty of excise on tobacco imposed by section 19 of the Act of 1934 shall, as on and from the 20th day of April, 1961, be charged, levied and paid at the several rates specified in Part II of the Schedule to this Resolution in lieu of the several rates at which the said duty is now chargeable by virtue of section 19 of the Act of 1960.

(4) That subsections (3) and (4) of section 19 of the Act of 1934 shall apply to tobacco which is chargeable with the duty of excise imposed by subsection (1) of that section at a rate specified in Part II of the Schedule to this Resolution, and for the purpose of such application the reference in the said subsection (3) to the Sixth Schedule to the Act of 1934 shall be construed and have effect as a reference to Part II of the Schedule to this Resolution.

(5) That the rebate on hard pressed tobacco mentioned in subsection (2) of section 17 of the Finance Act, 1940 (No. 14 of 1940), shall, in respect of any such tobacco sold and sent out for use within the State by any licensed manufacturer on or after the 20th day of April, 1961, be at the rate of thirteen shillings and four pence per pound.

(6) 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).

SCHEDULE.

DUTIES ON TOBACCO.

PART I.

Customs.

£

s.

d.

Unmanufactured:—

if stripped or stemmed:—

containing 10 lbs. or more of moisture in every 100 lbs. weight thereof

the lb.

2

9

8

containing less than 10 lbs of moisture in every 100 lbs. weight thereof

,,

2

15

2

if unstripped or unstemmed:—

containing 10 lbs. or more of moisture in every 100 lbs. weight thereof

,,

2

9

containing less than 10 lbs. of moisture in every 100 lbs. weight thereof

,,

2

15

Full

Preferential

£

s.

d.

£

s.

d.

Manufactured:—

cigars

the lb.

3

3

0

2

12

6

cigarettes

,,

3

1

0

2

10

10

Cavendish or Negrohead

,,

3

2

6

2

12

1

Cavendish or Negrohead manufactured in bond

,,

3

2

0

2

11

8

other manufactured tobacco

,,

3

0

6

2

10

5

snuff containing more than 13 lbs. of moisture in every 100 lbs. weight thereof

,,

3

0

0

2

10

0

snuff not containing more than 13 lbs. of moisture in every 100 lbs. weight thereof

,,

3

2

6

2

12

1

PART II.

Excise.

£

s.

d.

Unmanufactured:—

containing 10 lbs. or more of moisture in every 100 lbs. weight thereof

the lb.

2

8

containing less than 10 lbs. of moisture in every 100 lbs. weight thereof

,,

2

13

11

Manufactured:—

Cavendish or Negrohead manufactured in bond

,,

2

10

4

In the course of his Budget statement the Minister said he proposed to impose a tax to the extent of ld. on a packet of 20 standard size cigarettes and that he hopes that will give a yield of £930,000 in a year. I would ask the Minister if that figure were calculated on the assumption that there would be no drop in consumption or if his assumption is that there will be a drop in consumption and if that is provided for in this figure? Does this mean the retailer will charge an extra penny for the packet of cigarettes in the future or are the wholesaler and the retailer entitled to put on something extra? In other words, is this a net penny as far as the wholesaler and retailer are concerned? Are they entitled to move in and ask for an increase over and above this penny because of the fact that they also will have to pay more for their cigarettes and, therefore, must increase their investment in the purchase of cigarettes?

In respect of the calculation and the yield in a matter of that kind, I have to take the opinion of the Revenue Commissioners, because they have the experience of it. They estimate this yield from the penny increase in tax on the assumption that there will be some decrease in consumption. I do not know on what percentage decrease in consumption they calculate but they certainly assume there will be some decrease. As the Deputy is aware there are other types of cigarettes than the standard size—the 3/2d. packets— and it is assumed the price of those cigarettes will increase by one penny also. The Deputy knows there is very keen competition between the different brands of cigarettes at the moment and I think it is very unlikely that any attempt will be made to put the price up beyond a penny although, of course, this does not fix the price.

Are we to assume the penny is being put on the assumption by the Government that the purchaser will not have to pay a 1½d.?

Is the exact amount of the tax here a penny or is there a margin left?

We are not allowing any margin in the trade.

Is there anything included in this resolution for the penny being put on stocks held by the manufacturers?

We are not taxing stocks.

Has the Minister any calculation as to what that would involve?

I could only make a guess.

I shall accept the Minister's guess knowing, of course, that it will be inspired by the Revenue Commissioners.

I know what the yield was on previous occasions. I must go back in history a little. In 1952 there was 7d. put on and it gave £622,000. In 1956 5d. was put on and it gave £266,000. In 1957 there was an increase of 2d. and that gave £100,000. On these figures I think this year's sum would not be more than £50,000.

The Minister's table shows the sum he expects to get in revenue as £930,000. What would be the amount for a full year?

It is practically for a full year. It goes on tomorrow.

The Minister last year put on £980,000 as additional taxation on tobacco. Was that for the full year?

So that the £930,000 that is going on this year is in addition to the £980,000 that went on last year?

Perhaps we were a bit more optimistic about tobacco last year, because there had been a very big increase in consumption and sales of tobacco in 1959. There was not the same increase at all in 1960. It went down to a figure very little higher than 1959. That explains the difference between the figure given now and last year.

At any rate, from the point of view of people who pay taxation on tobacco, they are being asked to pay £930,000 additional this year and they were asked to pay £980,000 additional last year.

No, it was expected. They were not asked to pay. That was the estimate.

The same thing. How much, in fact, did the additional tax yield?

Our total estimate on the tobacco item was slightly too high.

Has the Minister an assurance from the tobacco manufacturers that they will not invoice the prices of their cigarettes to wholesalers and retailers at more than a penny increase?

I do not think so.

Possibly it could be more than a penny.

That could happen even if there were no taxation.

The danger only arises because you are interfering with it. If you leave it alone the thing will run all right. You are putting another £1 million on these people, trying to get something back.

We cannot afford to leave it alone.

I suppose this is one of the attractive features of the Budget for the consumer.

Resolution put.
The Committee divided: Tá, 75; Níl, 52.

Tá.

  • Aiken, Frank.
  • Bartley, Gerald.
  • Blaney, Neil T.
  • Boland, Gerald.
  • Boland, Kevin.
  • Booth, Lionel.
  • Brady, Philip A.
  • Brady, Seán.
  • Breen, Dan.
  • Brennan, Joseph.
  • Cotter, Edward.
  • Crowley, Honor M.
  • Cummins, Patrick J.
  • Cunningham, Liam.
  • Davern, Mick.
  • de Valera, Vivion.
  • Doherty, Seán.
  • Donegan, Batt.
  • Dooley, Patrick.
  • Egan, Kieran P.
  • Egan, Nicholas.
  • Fanning, John.
  • Faulkner, Padraig.
  • Flanagan, Seán.
  • Galvin, John.
  • Geoghegan, John.
  • Gibbons, James.
  • Gilbride, Eugene.
  • Gogan, Richard P.
  • Haughey, Charles.
  • Healy, Augustine A.
  • Hillery, Patrick J.
  • Hilliard, Michael.
  • Humphreys, Francis.
  • Johnston, Henry M.
  • Kenneally, William.
  • Kennedy, Michael J.
  • Killilea, Mark.
  • Brennan, Paudge.
  • Breslin, Cormac.
  • Briscoe, Robert.
  • Browne, Seán.
  • Burke, Patrick.
  • Calleary, Phelim A.
  • Carty, Michael.
  • Childers, Erskine.
  • Collins, James J.
  • Corry, Martin J.
  • Kitt, Michael F.
  • Lemass, Noel T.
  • Lemass, Seán.
  • Loughman, Frank.
  • Lynch, Celia.
  • Lynch, Jack.
  • MacCarthy, Seán.
  • McEllistrim, Thomas.
  • MacEntee, Seán.
  • Maher, Peadar.
  • Medlar, Martin.
  • Millar, Anthony G.
  • Moher, John W.
  • Moloney, Daniel J.
  • Mooney, Patrick.
  • Moran, Michael.
  • ÓBriain, Donnchadh.
  • ÓCeallaigh, Seán.
  • O'Malley, Donogh.
  • Ormonde, John.
  • O'Toole, James.
  • Ryan, James.
  • Ryan, Mary B.
  • Sheldon, William A.W.
  • Smith, Patrick.
  • Teehan, Patrick.
  • Traynor, Oscar.

Níl.

  • Barrett, Stephen D.
  • Barry, Richard.
  • Beirne, John.
  • Belton, Jack.
  • Blowick, Joseph.
  • Burke, James.
  • Byrne, Patrick.
  • Casey, Seán.
  • Coburn, George.
  • Coogan, Fintan.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, Declan D.
  • Costello, John A.
  • Crotty, Patrick J.
  • Desmond, Daniel.
  • Dillon, James M.
  • Dockrell, Maurice E.
  • Donnellan, Michael.
  • Esmonde, Sir Anthony C.
  • Fagan, Charles.
  • Flanagan, Oliver J.
  • Giles, Patrick.
  • Hogan, Bridget.
  • Jones, Denis F.
  • Kenny, Henry.
  • Kyne, Thomas A.
  • Larkin, Denis.
  • Lindsay, Patrick.
  • Lynch, Thaddeus.
  • McAuliffe, Patrick.
  • MacEoin, Seán.
  • McLaughlin, Joseph.
  • McMenamin, Daniel.
  • Manley, Timothy.
  • Mulcahy, Richard.
  • Murphy, William.
  • Norton, William.
  • O'Donnell, Patrick.
  • O'Higgins, Michael J.
  • O'Higgins, Thomas F
  • O'Reilly, Patrick.
  • O'Sullivan, Denis J.
  • Palmer, Patrick W.
  • Reynolds, Mary.
  • Rooney, Eamonn.
  • Russell, George E
  • Sherwin, Frank.
  • Sweetman, Gerard.
  • Tierney, Patrick.
  • Tully, John.
  • Wycherley, Florence.
Tellers:—Tá: Deputies Ó Briain and Loughman; Níl: Deputies O'Sullivan and Crotty.
Resolution declared carried.