Ireland’s Finance Minister Michael McGrath postponed a vaping tax over concerns it would discourage smokers from quitting with e-cigarettes.
Officials from the Department of Finance stated the need to strike a balance between discouraging young people from vaping and supporting existing smokers who switch to e-cigarettes to quit. Health officials recommended e-cigarettes be taxed differently based on their comparative harm versus traditional cigarettes,” according to media reports.
McGrath has said introducing a new tax on vapes will be “challenging” to implement. The country’s government intends to apply the levy on e-cigarettes as part of a public health response to vaping. “A domestic tax will require significant IT, administrative, control, and compliance costs,” McGrath said.
“We welcome the decision of the Minister of Finance and ask the Irish Government to keep a tax differential between electronic and traditional cigarettes in the future large enough to incentivize smokers to switch,” said Michael Landl, director of the World Vapers’ Alliance. “The risk profile of vaping products is much lower than that of combustion cigarettes and they should be taxed as such. If the tax had been approved, it would have pushed tens of thousands of vapers back to smoking.”
Research has shown that increasing vaping taxes can lead to higher smoking, particularly among young adults. The Department of Finance submission also expressed concerns over vapers switching to the black market if the tax was enacted.
Implementation of the tax was postponed with no new date in sight, while the government also waits for an EU framework to ease its implementation. The update of the EU Tobacco Tax Directive is expected to include an EU-wide excise tax on vaping products.
“Taxing vaping products similarly to combustion cigarettes would have a negative impact on public health as it would push vapers back to smoking or the black market and discourage smokers from switching,” Landl said. “We recommend other countries and the EU to follow Ireland’s example and refrain from implementing vaping taxes.”