Drop-off in smoking ‘could hit State revenues by €185m’

THE Government’s coffers could be down by as much as €185 million this year because people are smoking less since the introduction of the smoking ban.

Recent figures from the Revenue Commissioners showed that the number of tobacco stamps collected by the agency had fallen by 16% in the first six months of the year compared with the same period in 2003.

Although the measurement of tobacco stamps is not necessarily linked directly to sales of cigarettes, it is a good indicator of the trends to date and possible sales in the months to come, a spokesperson for the Revenue said yesterday.

The Exchequer received €1,157 million from excise duty from tobacco sales last year, up from the 2002 figure of €1,137 million. A 16% drop in revenue based on last year’s excise figure could cost the Exchequer €185.12 million in duties.

Tobacco tax stamps fell by 45% in January, compared with the same month last year, and have fallen each month since then. The stamps were down 27% in February, 26% in March and between 14% and 17% between April and June.

The figures support a statement issued by cigarette manufacturers The Gallagher Group in June, which said the amount of tobacco sold in Ireland had dropped by 9.3% in the first five months of this year.

“There are signs of some initial volume impact from the ban on smoking in the workplace, which came into force at the end of March.

“It is too early to assess the extent to which this reduction is due to short-term changes in trade buying patterns or to longer term changes in consumption,” the statement said.

The Gallagher Group put the 9.3% drop down to increases in duty, which affected the affordability of products and hit border trade. Cigarettes went up 25 cent after last December’s Budget, a 4.3% rise - two points above the rate of inflation of 2.3%.

Other surveys published earlier this year showed that the number of smokers in Ireland has dropped to just one in four of the population for the first time in living memory.

Amarach Consulting found that 25% of Irish people now classify themselves as smokers, An even lower figure of 24.5% was calculated by the Office of Tobacco Control as part of its regular monitoring.