There is “likely to be progress” on an e-cigarette tax in the upcoming budget, Minister for Finance Jack Chambers has said, though he stopped short of definitively saying one will be introduced next year.
His predecessor, Michael McGrath, last year announced a proposal to introduce a tax on e-cigarettes and vapes. The recent Tax Strategy Group papers published by the Department of Finance outlined challenges surrounding such a tax.
Mr Chambers said it was his intention “to make progress” on the tax in this year’s budget and there was ongoing work “on how we can operationalise that”. He said he wanted to “follow through” on Mr McGrath’s commitment and “the technicalities are being worked through on how we can make that possible for 2025”.
Mr McGrath said in last year’s budget that he was proposing the tax “in light of public health interests” and amid continuing delays to the revision of the EU Tobacco Products Tax Directive.
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The battery-powered devices turn an “e-liquid” into an aerosol that is inhaled by the user. Such e-liquids may or may not contain nicotine. The Tax Strategy Group papers said vapes were “not harm free” and “often contain many of the chemicals found in traditional cigarettes”.
“Given the difficulties in determining whether e-liquids contain nicotine and the level of nicotine they may contain, it may be most effective to apply a tax to all e-liquids, regardless of nicotine content,” the papers said.
Vapes are used by some people who are trying to quit smoking and the strategy group said any tax must strike a balance to ensure that such products were not priced “at a level that pushes people into the consumption of traditional tobacco products”.
The papers said the Revenue Commissioners could face a challenge enforcing such a tax due to the size of the products, which they noted “are easily portable and may be difficult to detect from a customs perspective”.
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