Irish Cancer Society tells Oireachtas Committee not to swallow the myth of Tobacco Tax and Smuggling

Society says the rate of illicit tobacco is dropping by 1% per year and is now at 11% according to the Revenue Commissioners 

The Irish Cancer Society today told an Oireachtas Committee that it is time for the Government to call the bluff of the tobacco industry by raising tobacco tax and not swallowing the myth of the link with smuggling.

The Society told politicians not to be fooled by pro-tobacco arguments that smuggling is increasing and will only become worse with the introduction of plain packaging. “The truth is the tobacco smuggling rate is steadily falling,” said Kathleen O’Meara, Head of Advocacy & Communications. “The Revenue Commissioners publish figures on the illicit tobacco trade and the percentage of illegal cigarettes coming into Ireland is falling at a rate of 1% per year. It has gone from 14% in 2011 to 13% in 2012 and the latest figures shows 11% of cigarettes in Ireland are illegal.

“Eleven percent is still too high but it compares quite well with our UK neighbours and the Revenue Commissioners are working hard to combat the organised crime gangs who import illicit tobacco.” Ms O’Meara was speaking at a meeting of the Joint Oireachtas Committee on Finance, Public Expenditure and Reform where she presented a pre-budget submission on behalf of the Irish Cancer Society and Irish Heart Foundation.

“In the past number of weeks and in particular in the debate on standardised packaging of cigarettes, the tobacco industry has been consistently overstating the rate of illicit tobacco,” said Ms O’Meara. “This is a deliberate attempt to plant the seeds of doubt in a government that has committed to a Tobacco Free Ireland by 2025, to delay the introduction of standardised packaging and to stop any tax increases on tobacco in next year’s budget.

“While strenuously opposing any government price hikes on tobacco saying it will lead to an increase in smuggling, the tobacco industry is simultaneously increasing its own prices. In fact since 2001, tobacco companies have imposed more price increases on their own products than the government has in tax increases, undermining one of their core arguments against tobacco tax. “Tobacco tax has been proven to be an effective public health policy. The smoking rate in Ireland has dropped from 31% in 1998 to 21.5% in 2013,” said Ms O’Meara.

The Irish Cancer Society and Irish Heart Foundation want a ‘price escalator’ on cigarettes that would result in an annual price increase equivalent to €0.50 in Budget 2015. Such a commitment would end the ad hoc nature of tax increases on tobacco.

The Department of Finance has said that since 2001 the tobacco industry has imposed higher price increases than the Government has in taxation increases. “It is time for the Minister for Finance to call their bluff. If price increases lead to smuggling, tobacco companies wouldn’t consider increasing their prices. They consistently do so while arguing against government measures to reduce smoking.

“Smoking costs the health service between €1-2 billion every year. At a time when our health service is stretched, it makes sense to reject the false arguments on tobacco smuggling and address the massive cost of this addiction to the Exchequer.”