Irish Finance Minister Pushes For 2 Euro Increase In Tobacco Tax

by Robert Lee, Tax-News.com, London

11 February 2003

Finance Minister, Charlie McCreevy has announced that he would be willing to impose an additional 2 euro levy on a packet of cigarettes if tobacco products are removed from the Consumer Price Index for the purposes of ascertaining inflation levels.

According to a report in the Irish Independent, Mr McCreevy raised the possibility of removing cigarettes from the CPI during the recent national pay talks, but the suggestion was studiously ignored by all participants.

In his 2003 budget, Mr McCreevy ignored a Department of Health request that he impose a 1 euro increase on packs of 20, deciding instead to increase the tax by just 50 cents. However, this is still expected to net the Irish government some 140 million euros in additional revenue this year.

The Irish Independent revealed on Monday that:

'The 1 euro tax sought by Michael Martin, to be ring-fenced for health expenditure, would have virtually doubled this amount - to 276 million euros. Mr McCreevy's light touch on cigarettes come at a time when sales of tobacco are rising steadily here, almost uniquely in the western world.'

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