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Budget 2012: Criticism for ‘tokenistic’ 25c hike on pack of 20 cigarettes

Budget 2012 will add an extra 25c to the price of a packet of 20 cigarettes, though alcohol excise is unchanged for now.

Image: Seth Wenig/AP

THE BUDGET’S MOVE to place an extra 25c charge on a packet of 20 cigarettes has been labelled an act of “tokenism” by the Irish Cancer Society.

Finance minister Michael Noonan announced the excise in the Dáil this afternoon – a move that is set to raise around €17 million for the exchequer next year.

The increased excise on cigarettes is to be spread pro rata across other tobacco products, with effect from midnight tonight.

The Irish Cancer Society criticised the move, however, saying the government had “snubbed” the opportunity to raise an extra €80 million through tobacco excise and taxes on cigarette manufacturers.

The society had called for excise to be increased by €1 per pack of 20, a move which it said would have raised €68 million. It had also campaigned for an increase in the corporation tax paid by tobacco companies, from 12.5 per cent to 25 per cent.

Kathleen O’Meara, the society’s head of communications, said the 25c increase was simply by a “nominal” amount, and called for the 25c increase to be ringfenced for supports to current smokers to help them quit the habit, adding:

A Spanish survey found the real cost of a price of cigarettes to be €107 for men and €75 for women, when medical dependency as a result of smoking is taken into account yet cigarettes are priced at between 8-11% of their true cost. This needs to change.

‘Christmas comes early’

The Irish Tobacco Manufacturers Advisory Committee also criticised the move, saying the government had ignored the recommendations of the Revenue Commissioners – saying the result was that “Christmas had come early for criminals”.

“This excise increase, coupled with the VAT increase of 2 per cent will now bring the price of a packet of 20 cigarettes above €9,” a spokesperson for the lobby said.

A packet of illegal cigarettes is available for around €3.20 – and consumers will have no choice now but to be pushed towards the illegal tobacco market.

The Irish Heart Foundation added its voice to the criticisms, with chief executive Michael O’Shea saying the government had “missed a genuine opportunity to put the health of our nation first”.

“The fact is that a €1 increase per pack would have resulted in extra revenue benefits of at least €96 million that would have paid for tobacco control measures and spared many families from the pain of cuts that didn’t have to be imposed,” he said.

Excise on alcohol – the other so-called “old reliable” for Budget increases – remains unchanged for the time being, though Noonan announced plans to introduce laws early next year to outlaw the cheap sale of alcohol in supermarkets.

The Vintners Federation of Ireland welcomed this commitment, saying the move would help to address “irresponsible advertising, merchandising and promotion of alcohol by supermarkets”.

It added, however, that the budget was a mixed one for the pub trade – with an increase in VAT increasing the cost of drink, despite the absence of any hike on alcohol excise duty.

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In full: TheJournal.ie‘s full coverage of Budget 2012

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Gavan Reilly

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