Higher tobacco duty results in less income for Exchequer

According to figures from the tobacco trade federation Cimbel, the Exchequer received 150 million euro less than expected from tobacco duty last year. Cimbel says that this is due to smokers finding cheaper alternatives.

Duty on tobacco went up sharply on 1 January 2016. The Federal Government had predicted that the Exchequer would receive 3.238 billion euro from tobacco excise in 2016. However, last year the Exchequer received 3,087 in tobacco excise, 151 million euro less than predicted.

The Chairman of the tobacco federation Cimbel Pierre Durinck says the increase in exercise has had the opposite effect to what had been intended.

"More than ever consumers have gone looking for cheaper alternatives, be it abroad or be it on the growing black market.”
Cross border trade with Brittons, French and Dutch buying there tobacco products here has also fallen sharply.

Excise duty on tobacco products went up again from 1 January 2017. The government predicts 3.349 billion euro in income will come from tobacco excise this year.

Mr Durinck believes that this won’t turn the tide and believes that the duty increase won’t mean more income for the Exchequer.