284. Deputy Ken O'Flynn asked the Tánaiste and Minister for Finance if his Department received or considered any independent analysis, including analysis prepared by an organisation (details supplied), on the likely effect of the e-liquid products tax on the illicit market and on tax leakage prior to commencement; and if his Department will publish any such assessment held. [67919/26]

285. Deputy Ken O'Flynn asked the Tánaiste and Minister for Finance if, prior to the introduction of the E-liquid Products Tax, his Department or the Revenue Commissioners assessed a tax-stamp and track-and-trace model as an alternative to the self-declaration first-supply model; the projected tax leakage under each option considered; and the reasons a self-declaration model was chosen. [67917/26]

I propose to take Questions Nos. 284 and 285 together.

Ireland currently operates a tax stamp system in accordance with section 73 of the Finance Act 2005, as amended, in respect of two specified tobacco products: cigarettes and roll-your-own tobacco. The taxation of tobacco products generally (including cigarettes and roll-your-own) is harmonised across the EU, which makes the products subject to the strict EU-wide control and movement regime. The Excise Movement and Control System (EMCS) is an EU-wide system, administered by national tax authorities, under which the movement of excisable products is tightly controlled through authorised tax warehouses with duty suspension arrangements. Excise liability arises when such products are released for consumption. The operation of Ireland’s tax stamp for cigarettes and roll-your-own tobacco is closely linked to the operation of EMCS for these products.

At present, there is no EU-wide harmonised taxing regime for e-liquid products. Therefore, many Member States, including Ireland, have introduced their own national excise on these products for health policy reasons. As a non-harmonised national excise, Ireland’s operation of E-Liquid Products Tax (EPT) has to be compatible with EU Single Market rules. Consequently, e-liquid products entering the State from other EU Member States or from Northern Ireland 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 tax.

During the design of EPT, consideration was given by my Department and by Revenue to the appropriate charging point for the tax. Approaches to other Irish excises and similar taxes in other jurisdictions were considered. It was concluded that charging EPT at the point of first supply in the State is the most appropriate approach.

An 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 control. Such a system could only have very limited effectiveness in a non-harmonised regime – given that the system 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. In these circumstances, the introduction of a tax stamp would not be a useful tool in securing the collection of EPT.

The Deputy will be aware that in July 2025, the EU Commission published its proposed recast of the Tobacco Taxation Directive. Among other changes, the proposal involves introducing harmonised taxation of e-liquid products across the EU and bringing these products within the scope of EMCS, which will ensure the movements of e-liquid products into and within the Union will be recorded and monitored.

The Deputy has also referred to the illicit vape market. He may wish to note that, whereas  my Department and Revenue deal with taxation matters, policy and legislation regarding e-liquid and e-cigarette products generally, including regulation of their content, and of their sale and promotion is dealt, with by my colleague the Minister for Health and her Department, and enforced principally through the network of Environmental Health Officers operating under the Health Service Executive.