The Irish Minister for Finance has suggested that the introduction of a tax on vapes is likely to be realized in the 2025 budget, with the rate of the tax likely to increase gradually over the next few years. At the same time, the exact rate of tax is subject to discussion, taking into account the European Union Directive on vape brands and the impact on smuggling and illicit trade. In addition, sales of disposable vape products in Ireland in the first four months of 2023 have already significantly exceeded annual sales in 2022.
A tax on vapes may be introduced in 2025
According to an Aug. 1 report by Newstalk, Ireland’s finance minister said it was “very likely” that a vape tax would be introduced in the upcoming budget and that the rate would soon rise.
Michael McGrath, then Minister for Finance. (Michael McGrath) He said a “domestic tax” would be imposed “having regard to the public health interest”. At the time, he said that the enactment of legislation on vape taxation would require “a great deal of preparation”.
It is thought that the government may wait for the European Union’s directive on these products to be taxed again.
Jack Chambers, the new finance minister (Jack Chambers), said the measure was moving forward.
- “We plan to make progress in this year’s budget. The tax authorities and the Treasury are working together to see how this can be achieved.
The minister said he wants to introduce a tax on vapes.
I will clarify the information further on budget day, but I want to implement Minister McGrath’s commitment for next year.
- “We’re looking at the details and the technicalities of how we’re going to achieve that in 2025…”
Tax rates are likely to increase gradually over the next few years
Minister Chambers said they are “working on the finer details” of exactly how it will work.
When asked if the measure would be implemented in the 2025 budget, the minister replied, “I would say it’s quite possible.”
The minister said that any such tax on e-cigarettes would have to take into account many factors.
- “Changes are also taking place in Europe and the tax rate set must take into account the impact on smuggling or illicit trade in vapes.”
- “I expect that once such a tax is introduced into a given budget it will gradually increase shortly.”
This is an issue that future governments and future ministers will need to determine whether or not to reach the same tax rate as tobacco.
In the first four months of 2023 alone, Ireland reportedly sold 26.3 million disposable vapes, a significant increase on the 5.6 million vapes sold in the whole of 2022.
