BUDGET 2016: Smokers to cough up more for their tobacco

Among the old reliables in Michael Noonan’s budget, consumers of alcohol and motorists escaped unscathed, but cigarette smokers will have to cough up another 50 cent per packet.

BUDGET 2016: Smokers to cough up more for their tobacco

The drinks industry was far from happy, though, as it had sought a decrease in excise duty on beer, spirits and wine.

The hike on tobacco was welcomed by the Irish Cancer Society (ICS) but was criticised yesterday by tobacco interests as another incentive for smugglers and described by smoking groups as an attack on the poor and elderly.

“The hike will be a disincentive for children to start smoking and will encourage current smokers to quit,” said the ICS.

The increase is the most substantial since 2008 and builds on the 40 cent rise in 2015. The ICS says sharp, regular spikes in tobacco price will help the Government reach its target of a “smoke-free generation” by 2025.

Kathleen O’Meara, ICS head of advocacy and communications, said: “The Irish Cancer Society is pleased that cigarette price is continuing to rise and by such large amounts.

"It sends a strong signal to the tobacco industry that the Government is serious about reaching its target of a smoke-free Ireland by 2025. This year’s hike will encourage people to stop smoking and ultimately save lives.”

However, pro-smoking campaigners have condemned the 50 cent rise as “excessive” and an “unwarranted attack on one million voters”, including poor and elderly smokers.

John Mallon, spokesman for smokers’ rights group Forest Éireann, said: “Smokers tend to come from more deprived areas. The Government is targeting the poor to subsidise the better- off.

“This excessive increase will also hit the elderly, many of whom are not well off but get a lot of pleasure from smoking and don’t want to quit.

“This is an unwarranted attack on one million voters, which is extraordinary so close to an election.”

He said the hike will fuel illicit trade, a view echoed by JTI Ireland, a member of the Japan Tobacco group of companies and Ireland’s leading tobacco manufacturer.

Irish consumers continue to pay the highest prices for tobacco in the eurozone.

JTI general manager Igor Dzaja said: “We know that steep excise increases such as this stimulate the illegal trade. Yet every year we see the Government being pushed to introduce these policies without any assessment of their impact and negative consequences.

"These excessive annual tax hikes continue to create fertile ground for the black market so, rather than raising revenues, it is playing into the hands of criminal smugglers.”

On alcohol, the Drinks Industry Group of Ireland (DIGI) which represents suppliers, pubs, restaurants, hotels, and independent off-licences, said the decision not to reduce excise levels in the budget was a missed opportunity. While it welcomed the up-front excise relief for micro-breweries, it said a reduction would have supported jobs.

Peter O’Brien, chair of DIGI said: “An excise reduction would have supported consumers and jobs. The drink and hospitality sector supports 92,000 jobs from grain to glass.”

The Vintners’ Federation of Ireland also criticised the decision to maintain current levels of excise duty, but took a more positive view overall.

“The phasing in of the PAYE tax credit for publicans and other small businesses is clear recognition of the contribution these businesses make to the Irish economy,” the VHI said.

“We equally welcome the measures around the reduction in capital gains tax for entrepreneurs and the release for micro-breweries.”

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