The price of a packet of 20 cigarettes was set to rise to €15 from midnight on Tuesday after the Dáil approved a 50c increase by 87 votes to 47 in the first vote on Budget 2022.
A packet of roll-your-own tobacco will increase pro rata by 70c. The increase is expected to generate €56 million annually.
Tánaiste and Minister for Enterprise Leo Varadkar rejected opposition suggestions that the tax had reached a “tipping point” of “diminishing returns” with people buying cheaper illicit tobacco products instead because excise revenue on tobacco sales continued to increase.
The House rejected a proposal by Sinn Féin TD Matt Carthy to increase the price by 30c rather than 50c because of those concerns by the Revenue Commissioners about increased illicit tobacco sales.
In 2020 excise and tax revenue on tobacco sales rose to €1.201 billion, up from €1.131 billion in 2019, an increase of €70 million.
Mr Varadkar said revenue is projected to increase to €1.262 billion this year.
The increased revenue was “possibly” due to restrictions on travel because of the pandemic and they would have to monitor the impact of easing restrictions and duty free sales on tobacco income.
Mr Varadkar said the policy was working because the numbers smoking were down from nearly 30 per cent in 2007 to 14 per cent in 2019 and lower still for younger people.
Aggressive
People Before Profit TD Richard Boyd Barrett said punishing people financially for an addiction does not work and is an aggressive form of taxation. He said “I strongly doubt you will get to a tobacco-free Ireland in this way”, referring to the target of having just 5 per cent of people smoking by 2026.
He said there should instead be an investment in a strong a public health education campaign which he believed would be far more effective “especially since there is some evidence that smoking among young people has recently spiked”.
Labour Party TD Duncan Smith said however that 20 per cent of smokers are under 24 and making tobacco “prohibitively expensive” is the way forward. He had grown up with a “visceral” hard hitting anti-smoking campaign “and it did not work”.
At €15 for a packet of 20 cigarettes it has “reached a roundy figure that people will remember”, he added.
Reformed smoker Richard O’Donoghue who gave up his 40 a day habit said smoking helped to calm people and it was much better than the illegal drugs that so many people used to calm themselves.
He called on the Tánaiste not to put the 50c on cigarettes but instead to use “reverse psychology” with no increase and encourage people to quit.
Fianna Fáil TD Brendan Smith had heard of people “ going door to door selling illicit cigarettes” in his Cavan-Monaghan constituency.
He pointed to seizures of large-scale raw tobacco “that would indicate there are factories manufacturing illicit cigarettes”. He appealed to the Tánaiste to ensure the Revenue Commissioners “will have resources to tackle the manufacture of this illicit product and prevent people making monetary gain over this illicit practice” that played with people’s health.
