Revenues Tax Strategy Group Publishes Prebudget Analysis

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We note the TSG report on tobacco which we have published an extract below. Of interest is the official acknowledgement that revenues from tobacco sales during the Covid period have increased.

If ever there was proof of the damage that smuggling and importation from foreign countries (duty paid) has on the Irish economy look no further, than these figures.

On tobacco the officials say that 17pc of people smoked in 2019 and there are 165,00 less smokers than there were five years ago.

They note that the Programme for Government has set a smoking prevalence target of 5pc of the population by 2025.

Ireland has some of the highest rates of duty on tobacco products in the EU reflecting a long-standing policy of levying high rates to meet public health targets.

They said that excise rate increase of 50c for a pack of 20 cigarettes have been introduced in every Budget for the last five years with the cost of a pack now standing at €13.50.

Another 50c rise this year – along with increased excise on roll your own tobacco – would bring in an estimated €56.9m.

The officials say that the Revenue has said that increases in excise may not lead to greater yields due to uncertainty about decreases in smoking prevalence and other factors.

The estimated tobacco products tax yield for 2020 is €1.175bn. Forecasts were revised downwards due to Covid-19 but in the year to the end of August receipts were €26m ahead of the revised figure.