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Tobacco Companies: Increase In Tobacco Tax Only Helps Smugglers

Published on Oct 20 2014 3:49 PM

Tobacco Companies: Increase In Tobacco Tax Only Helps Smugglers

Last week’s Budget saw the introduction of a tobacco excise increase, which has drawn criticism from tobacco companies in Ireland. The increase means that a packet of premium cigarettes will now cost around €10, an rise of 40 cent on each pack.

Furthermore, there will be a pro-rata increase on other tobacco products, and roll-your-own tobacco will increase by a further 20 cents per 25 gram pack.

In response to the increase, John Player released a statement saying that it was "taken aback" by the government’s decision to increase the tax: "This is not the time to be further incentivising the criminal community," it said.

John Player also said that a "parallel illegal tobacco supply chain exists in this country that pays no tax at all to the Irish Exchequer" and that smugglers will certainly "party" following the announcement, as it will only serve to drives consumers to the illicit market.

Japan Tobacco International (JTI) is equally unimpressed with the government’s decision. JTI Ireland Sales Director Derek Mooney said, "The decision to increase excise tax on cigarettes by 40c and Roll Your Own 25g packs goes against the government’s objective to raise revenue.

"Sudden and steep tobacco tax increases influence consumers’ choices, leading them to buy cheap, illegal tobacco. This move is counterproductive, as the Exchequer risks losing revenue at the expense of illegal trade and criminality in local communities."

Mooney finished by saying that past evidence shows that large increases such as this "do not have the desired impact of driving down consumption, but rather have the opposite effect." 

© 2014 - Checkout Magazine by Genna Patterson

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