Ireland skips tax increase on e-juice

A planned new tax designed to make life a little more pleasant for smokers has now been scrapped in Ireland. Authorities fear that it would lead to fewer people quitting smoking. 

It was a planned item in the Irish budget that has now been rethought. The Department of Finance had planned to tax e-cigarettes and e-juice more heavily on the grounds of discouraging young people from starting. But the country's health ministry instead recommended that e-cigarettes be taxed differently from traditional nicotine products based on the fewer health risks. It also suggested that any new tax on e-cigarettes be earmarked for use in tobacco control and to further reduce smoking in Ireland.

Balanced legislation

In an advance budget, the Department of Finance and Michael McGrath, the country's finance minister, say that a balance must be maintained to discourage young people from taking up vejpa - while supporting smokers who want to quit. Exactly what this balance will look like is still unclear, but so far it will not be via tax pressure.

Awaiting EU directives

The issue also relates to the fact that no approach to vejp products has yet been agreed at EU level. 

"It is a complex tax to implement without an EU framework, so it will take some time to design and implement," the Irish Department of Finance said in its pre-budget statement. 

Illegal trade

It adds that any increase in taxes on cigarettes and other tobacco products would probably not generate any additional revenue, warning that smokers would instead switch to alternatives, both legal and illegal. The use of illegal products or packs from other EU countries is at its highest level ever in Ireland, costing the state around €415 million a year, according to the Department of Finance.

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