299. Deputy John Lahart asked the Minister for Finance if he will outline, in the context of pending legislation concerning the regulation of the vaping industry, the reason his Department has not insisted on a tax stamp for vaping products similar to tobacco products, as is the case in some EU Member States; his views on international best practice; the estimated revenue in the context of a full year of tax on vaping products without a stamp; and to provide an account of the tax take in countries where a tax stamp is legislated for on vaping products. [7251/25]

Paschal Donohoe, Minister for Finance: The taxation of e-cigarettes and novel products, including e-liquids, is expected to be addressed at EU level through a revision of the Tobacco Tax Directive (2011/64/EU). However, the Commission’s proposals for revision of the Directive have been postponed on a number of occasions in the last few years, and in the meantime, a significant number of Member States have moved to introduce domestic taxes on e-cigarette products. In the interest of public health, we too have decided to proceed with the introduction of a national tax. Nonetheless, the introduction of a harmonised tax framework for these products across the EU remains our preferred approach, as it will be the most effective way to address the policy and operational challenges that arise. In October 2023 as part of the Budget 2024 speech, the then Minister for Finance announced his intention to introduce a domestic tax on e-cigarettes and vaping products. Following in-depth engagement between the Department of Finance and Revenue on the design of such a measure, proposals were approved by the Minister for Finance for an E-Liquid Products Tax (EPT) - a new tax that will apply to the liquids used in e-cigarettes, including refill cartridges for refillable vaping devices. Legislation for EPT was enacted in Finance Act 2024 and will be commenced later this year. This allows Revenue the necessary time to set up the information technology, administrative, operational and compliance systems and processes required to administer and collect the new tax. Under the new law, EPT will apply to both nicotine-containing and non-nicotine-containing e-liquid products. Similar to the approach for other national excises, the taxing point will be the first supply of e-liquid product in the State and the tax will follow Revenue’s standard model of self-assessment. Suppliers of e-liquid product will be required to register with Revenue in advance of making a first supply of e-liquid products in the State. These suppliers will be liable to account for and pay the tax. With regard to tax stamps, the Deputy will be aware that Ireland currently operates a tax stamp system in accordance with section 73 of Finance Act 2005 (as amended) in respect of two specified tobacco products: cigarettes and roll-your-own tobacco. Ireland’s tax stamp is part of the control regime for the taxation of these particular products.

The taxation of tobacco products generally (including cigarettes and roll-your-own tobacco) is harmonised across the EU, which makes the products subject to the strict control and movement system for excisable products (EMCS). The control regime also applies to mineral oils and alcohol. The EMCS is an EU-wide system, administered by national tax authorities, under which the movement of the product is tightly controlled through authorised tax warehouses with duty suspension arrangements. The charge to tax on a harmonised excisable product (such as tobacco) arises when the product is ‘released for consumption’ from the tax warehouse, and in the case of the specified tobacco products, this is the point at which the tax stamps are applied. As a non-harmonised national excise, the operation of EPT has to be compatible with the EU Single Market rules which preclude the use of cross-border movement controls. These rules mean that e-liquid products coming into the State from other Member States or Northern Ireland (which is part of the Single Market for goods) cannot be subject to the type of cross-border movement controls that are integral to the regime for the existing EU-harmonised excises, such as tobacco. During the design of EPT, serious consideration was given by Revenue and my Department to the appropriate charging point for the tax. Approaches to other Irish excises were considered as were approaches to similar taxes in other countries. It was concluded that charging EPT at the point of first supply of the product in the State is, on balance, the most appropriate approach. In particular, the alternative model of a ‘released for consumption’ approach to charging EPT would require the development and operation of a complex national (non-EMCS) system of tax warehousing and controls; crucially, these could only have very limited effectiveness in a non-harmonized regime - given that they could only operate on a national basis and without recourse to cross-border controls - and the cost of setting up and operating such a system could not be justified given such limitations on its potential effectiveness. Ireland’s existing tax stamp is closely integrated to the ‘released for consumption’ tax model used for tobacco. Having regard to the different tax model (‘first supply’) that has been legislated for EPT, it is not clear at this stage that a tax stamp would be a useful tool in securing the collection of the new tax. However, this could be reviewed in the future, in light of the actual experience of operating EPT when it is up and running. Also, it is expected that the EU’s revision of the Tobacco Tax Directive, when progressed, will introduce harmonised measures for e-liquids across the EU which would see e-liquids brought into the current EMCS system. At such point, the extension of the Tobacco Tax Stamp system to such products may be useful.

The Deputy refers to pending legislation to regulate the vaping industry. The Tobacco Products Directive (2014/40/EU), dealt with by the Department of Health, regulates e-cigarettes and nicotine-containing e-liquids placed on the market in the EU. It sets a maximum nicotine concentration level and volume, and other health and safety rules on ingredients and packaging. The Directive was transposed into Irish law by the European Union (Manufacture, Presentation and Sale of Tobacco and Related Products) Regulations 2016. In recent years, the Department of Health has introduced further measures to regulate e-cigarettes and similar products such as prohibiting the sale of these products to those under 18, restrictions on advertising, points of sale and promotion of e-cigarettes as well as introducing a new licensing system for sellers of nicotine inhaling products such as e-cigarettes which is due to commence in February 2026.

Further measures regarding the regulation of these products are to be introduced by the Minister for Health under the Public Health (Nicotine Inhaling Products) Bill 2024. The Deputy has also asked about projected yield from the new tax and how this compares to other Member States. Based on the available information about the e-cigarette market size in Ireland and the prevalence of e-cigarette products, the Department of Finance has tentatively estimated that a tax of 50 cent per millilitre of e-liquid will yield in the order of €17 million in a full year. While most EU Member States now have national excises relevant to tobacco-alternative products such as e-cigarettes, in the absence of common rules on their taxation and given the rapidly developing market, there are significant differences between Member States’ approaches which makes direct comparison difficult. These include differences in the tax base (the range of products within scope), how products are defined, the point of taxation, and the national control infrastructure, including whether a tax stamp is used. Given the Single Market rules which allow free movement of goods, this lack of harmonisation of the tax rules limits both the effectiveness and the efficiency of any domestic approaches that individual Member States can take to taxing the products. This is why my Department, along with similar authorities in fifteen other Member States made a joint statement in December 2024 calling on the new Commission to make the modernisation of tobacco taxation legislation at EU level a key priority for its upcoming term.

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Dáil Éireann debate. Question 684 – Misuse of drugs [7815/25]

842. Deputy Michael Cahill asked the Minister for Health if there is proposed legislation to load an €1,800 annual licence on all shops to sell cigarettes and vapes (details supplied); if she will reconsider this proposal as it does nothing to discourage members of the public from purchasing cigarettes or vapes; and if she will make a statement on the matter. [7225/25]

Kieran O'Donnell, Minister of State at the Department of Health: Tobacco use is the leading cause of preventable disease, disability and death in Ireland, with 4,500 people dying each year from tobacco-related diseases. Smoking related deaths are mainly due to cancers, chronic obstructive pulmonary diseases (COPD) and heart disease. The cost to society from smoking due to healthcare costs, welfare and loss of productivity is estimated to be in excess of €10 billion per year. It is therefore the Government’s objective under the 2013 Tobacco Free Ireland policy to effectively eliminate smoking.

The Public Health (Tobacco Products and Nicotine Inhaling Products) Act 2023 fulfils the legislative commitments made in Tobacco Free Ireland, including introducing a licensing system for retailers with the specific intention of denormalising tobacco retailing and reflecting the seriousness of the harms caused by tobacco compared to other products. It is also a pre-requisite for Ireland to ratify the Protocol to the Framework Convention on Tobacco Control which is designed to eliminate the illicit trade in tobacco products.

The final Bill was debated and passed in the Oireachtas in 2023. The Act provides for an annual licence per outlet for those wishing to sell:

1. a) tobacco
2. b) nicotine inhaling products, or
3. c) tobacco and nicotine inhaling products.

The provisions of the Act relating to the requirement for a licence to sell these products were commenced in December 2024 under the Public Health (Tobacco Products and Nicotine Inhaling Products) Act 2023 (Commencement) (No. 3) Order 2024. The licence fees were set in the Public Health (Tobacco Products and Nicotine Inhaling Products) Act 2023 (Fees) Regulations 2024. As with alcohol licensing, which carries a similar fee and structure, it is a matter for each individual retailer to decide whether or not to sell these products, and to apply for the relevant licence if so. The system will come into operation on 2 February 2026.

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Dáil Éireann debate. Question 215 – Tobacco control measures [6537/25] 19 February 2025

215. Deputy Joe Cooney asked the Minister for Health if her Department will be introducing of a proposed licensing fee for retailers to sell tobacco products and nicotine inhaling products from 2 February 2026; and if she will make a statement on the matter. [6537/25]

Jennifer Carroll MacNeill, Minister for Health: Tobacco use is the leading cause of preventable disease, disability and death in Ireland, with 4,500 people dying each year from tobacco-related diseases. Smoking related deaths are mainly due to cancers, chronic obstructive pulmonary diseases (COPD) and heart disease. The cost to society from smoking due to healthcare costs, welfare and loss of productivity is estimated to be in excess of €10 billion per year. It is therefore the Government’s objective under the 2013 Tobacco Free Ireland policy to effectively eliminate smoking.The Public Health (Tobacco Products and Nicotine Inhaling Products) Act 2023 fulfils the legislative commitments made in Tobacco Free Ireland, including introducing a licensing system for retailers with the specific intention of denormalising tobacco retailing and reflecting the seriousness of the harms caused by tobacco compared to other products. It is also a pre-requisite for Ireland to ratify the Protocol to the Framework Convention on Tobacco Control which is designed to eliminate the illicit trade in tobacco products.The final Bill was debated and passed in the Oireachtas in 2023. The Act provides for an annual licence per outlet for those wishing to sell:a) tobaccob) nicotine inhaling products, orc) tobacco and nicotine inhaling products.The provisions of the Act relating to the requirement for a licence to sell these products were commenced in December 2024 under the Public Health (Tobacco Products and Nicotine Inhaling Products) Act 2023 (Commencement) (No. 3) Order 2024. The licence fees were set in the Public Health (Tobacco Products and Nicotine Inhaling Products) Act 2023 (Fees) Regulations 2024. As with alcohol licensing, which carries a similar fee and structure, it is a matter for each individual retailer to decide whether or not to sell these products, and to apply for the relevant licence if so. The system will come into operation on 2 February 2026.