Ireland Suspends E-cigarette Tax Plan
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Ireland suspends e-cigarette tax plan
Ireland has suspended its e-cigarette tax plan as more consumers prepare to use e-cigarettes as a means to reduce or quit smoking.
As the New Year rapidly approaches, more and more consumers are preparing to turn their attention to e-cigarettes as a means to reduce or quit smoking. According to Statista data, the revenue of the Irish e-cigarette market in 2023 will be approximately 100.9 million euros, with an annual growth rate of 3.61% (CAGR 2023-2028).
In Ireland, the e-cigarette market revenue per person in 2023 is approximately €23.46, taking into account the total population. Ireland's e-cigarette market has experienced a surge in popularity as more smokers turn to e-cigarettes as a healthier alternative.
Important legislative changes were introduced within the e-cigarette category this year. A bill to ban the sale of e-cigarettes to people under 18 passed its final legislative stages in Shawnard on Tuesday, December 5.
"For many years, Ireland has lagged behind its EU counterparts in restricting sales to minors. E-cigarettes are for adult use only and this legislation will play a key role in reducing the risk of minors being exposed to these products," British American Tobacco said David Melinn, Country Manager for the Irish company.
The bill also includes a ban on e-cigarette advertising near schools and on public transport, as well as the introduction of an annual retail license fee expected to be €500 per store.
Irish Finance Minister Michael McGrath has delayed imposing a tax on e-cigarettes over concerns it would discourage smokers from using e-cigarettes to quit smoking.
Officials at the Treasury Department pointed to the need to find a balance between discouraging young people from vaping and supporting existing smokers to switch to e-cigarettes to quit smoking. According to media reports, health officials have recommended taxing e-cigarettes differently based on their relative harm compared to traditional cigarettes.
McGrath said introducing a new e-cigarette tax would be "challenging". The government intends to impose a tax on e-cigarettes as part of its public health response to e-cigarettes.
Michael Landl, director of the World Vaping Alliance, said: "We welcome the Finance Minister's decision and ask the Irish Government to maintain a sufficiently large tax differential between e-cigarettes and traditional cigarettes in future to incentivize smokers to switch. E-cigarette products have a much lower risk profile than combustion cigarettes and should be taxed accordingly. If the tax is approved, it will force tens of thousands of vapers to return to smoking."
Implementation of the tax has been delayed and a new date has yet to be set while the government awaits EU frameworks to facilitate implementation. Updates to the EU Tobacco Tax Directive are expected to include an EU-wide excise tax on e-cigarette products.
