Fighting the scourge of smoking addiciton
There is a limit to how much the price of tobacco can rise before diminishing returns set in. The famous Laffer curve shows that when tax rates increase beyond a certain point, the tax collected decreases. Prohibition policies have a history of failure. Tobacco smuggling cost the State an estimated €420m in lost excise duty and revenue in 2010.
Increasing the price of cigarettes too much, too soon, would drive the consumer price index wild. The rate of inflation would go out of control. In the 12 years from 1983 to 1995, the price of tobacco doubled.
