Pre-budget submissions for Finance Minister Paschal Donohoe on tobacco, alcohol, and carbon taxes

Tax income from cigarettes and tobacco had remained steady no matter how often the price increased in the budget, according to Department of Finance records.

A submission prepared for Finance Minister Paschal Donohoe also suggested a decline in airline travel had led to an increased tax haul from tobacco sales throughout this year.

It said that a 50-cent increase on the price of a pack of cigarettes had now been implemented six years in a row, with Minister Donohoe opting for yet another price hike in October’s budget.

The submission said tobacco excise receipts had been €1.2 billion last year and were forecast to rise to €1.262 billion for the entirety of 2021.

“This suggests a continuation of a longer-term trend of tobacco excise receipts remaining stable at around €1.1 billion per annum, with the effect of rate increases balanced out by the effect of volume reductions,” it said.

The submission also speculated that revenue from cigarette taxes had risen because of the pandemic due to lower levels of airline travel.

Normally, up to 10% of cigarettes consumed each year are brought in from EU member states that have much lower taxes and prices.

Also available in this upload are discussion on tobacco duties, and submissions on alcohol and carbon taxes.