362. Deputy Emer Currie asked the Minister for Finance whether his Department has carried out, or plans to carry out, an assessment of the potential implications for the tobacco market arising from the proposed tax equalisation measures under the revised EU Tobacco Taxation Directive, particularly where higher excise rates may increase the price of roll-your-own (RYO) tobacco and fuel increases in the already high-level of smuggling and illicit trade in RYO tobacco; and if he will make a statement on the matter. [63459/25]

On 16 July 2025, the EU Commission published its proposal for a recast of the Tobacco Taxation Directive. The proposal involves an increase in minimum tax rates for traditional tobacco products, expansion of the Directive’s scope to encompass newer products (including the liquids for vapes, nicotine pouches, and potential future products), and extension of the Directive to encompass raw tobacco, so as to help in the fight against illicit manufacturing. Products within the scope of the Tobacco Tax Directive are not alone subject to harmonised rules on taxation, but they are also subject to the EU-wide Excise Movement and Control System (EMCS) which limits and regulates product movements.

Ireland was one of the Member States who urged the Commission to bring forward proposals to update and strengthen the EU’s legislative framework for tobacco and related products, and therefore I have strongly welcomed the Commission’s document. With around 700,000 deaths annually in the EU arising from tobacco, robust action is required across the Union, and updating and realigning how tobacco and related products are taxed and controlled across the Union is a necessary step in this regard. Measures contained in the proposal – particularly increased minimum tax rates and the inclusion of newer products – will help ensure that tobacco and related products become less affordable across the EU and that the harms created by such products are better reflected in their price. Stronger EU-level taxation and regulation will help to protect our young people especially and strengthen Europe’s path towards a tobacco-free generation.

Similar to the situation across the EU, smoking is Ireland’s leading cause of preventable death, and the Government is committed to reducing smoking prevalence, especially among younger people. We pursue this public health objective on a whole-of-Government basis through strategies across a range of policy areas, including taxation. In line with the international best practice advocated by the World Health Organisation and our own Commission on Taxation and Welfare, Ireland’s tax policy regarding tobacco is focussed on disincentivising smoking. As Minister for Finance, I and my predecessors have pursued the approach of making annual tax changes to raise the price of tobacco, with the clear objective of lowering the level and uptake of smoking in Ireland.

Under law, Revenue is responsible for the implementation of taxes and duties, including those that apply to tobacco products. Revenue is well aware that, with Ireland’s taxation of cigarettes the highest in the EU and our taxation of roll-your-own (RYO) tobacco amongst the highest, there is an incentive for certain actors to source and supply cheaper products, albeit illegally. In this context, Revenue targets the illicit tobacco trade through a range of measures. Central to this is identifying and targeting the smuggling of illicit tobacco products into the State, with a view to disrupting the supply chain, seizing the products and, where possible, prosecuting those involved. Revenue’s strategy involves developing and sharing intelligence on a national, EU and international basis, the use of analytics and detection technologies, which includes analysis of online activities, and ensuring the optimum deployment of resources on a risk-focused basis. Revenue keeps its measures and controls under continuous review having regard to ongoing risk assessment of smuggling and criminal activities, and evolving operational needs, and adjusts its approach as required. A current example of such an adjustment is the strengthened controls that Revenue are introducing, with effect from 9 December, regarding the quantity of duty-paid tobacco products from elsewhere in the EU a private individual brings into the State in their baggage for their own use.

Increase in the EU minimum tax rates for tobacco products under the Recast Directive proposal will support public health across the EU. With Ireland already having tobacco tax levels well above these minima, I also welcome the fact that an increase in the EU’s minimum tax rates for tobacco should reduce the differential between the price of tobacco products here compared to other Member States. Together with the control measures implemented by Revenue, such a development should further help to drive down the level of duty-paid tobacco illegally brought into Ireland from other EU Member States for supply.

The EU Commission’s proposals have already been subject to impact assessment at EU level which is available online :taxation-customs.ec.europa.eu/taxation/excise-duties/excise-duties-tobacco/revision-tobacco-taxation-directive-proposal_en.