A 50 cent increase in the excise duty on a packet of 20 cigarettes was the only tax increase announced in Budget 2017.
The increase takes the average cost of a packet of 20 cigarettes to €11 and has been welcomed by health groups, although the smoking lobby and some retailers were less impressed.
"If the Government is to achieve its objective of establishing a smoke-free Ireland by 2025 then it must consistently increase the price of tobacco," said Ash Ireland chairman Dr Patrick Doorley.
At present, 19.5 per cent of the adult population in Ireland smokes – down from 29 per cent in 2003.
“It would be possible to reduce smoking levels by a further 10 per cent at least in the next 10 years if there are consistent and significant increases in tobacco price; combined with other measures such as the introduction of standardised packaging,” Dr Doorley said.
He accepted that the smuggling of tobacco products into the Republic was a major issue, but also warned people to be “wary of tobacco industry efforts to use smuggling as a reason for not introducing effective measures, which can improve the nation’s health”.
He expressed disappointment that VAT was not reduced on nicotine replacement therapies such as patches. He also said Minister for Finance Michael Noonan had ignored calls to introduce a 50 cent environmental levy on the tobacco industry for each pack of cigarettes.
The Irish Cancer Society also welcomed the price increase and said it would act as "a disincentive for children to start smoking and will encourage current smokers to quit".
The organisation's head of advocacy Donal Buggy said the increase sent "a strong signal to the tobacco industry that the Government is serious about reaching its target of a Tobacco Free Ireland by 2025."
The increase was not, however, uniformly welcomed, with some in the tobacco lobby claiming excise increases merely amplify the price differential between legal and illegal cigarettes, making it more and more attractive for smokers to buy smuggled products.
Irish Tobacco Manufacturers' Advisory Committee spokeswoman Joan Mulvihill accused the Government of "again undermining the legitimate tobacco industry and retail, while not achieving any policy objective".
Her comments were echoed by the chairman of the Retailers Against Smuggling group, Benny Gilsenan.
“A greater percentage of poorer people in Irish society smoke than any other social class,” he said. “ To add insult to injury, by pushing consumers to affordable smuggled products, Minister Noonan’s measure will also help criminal gangs to sell their smuggled product which in turn negatively impacts legitimate retailers.”
