Ireland suspends e-cigarette tax plan

As the New Year approaches rapidly, more and more consumers are preparing to turn their attention to e-cigarettes as a means of reducing or quitting smoking. According to Statista data, the revenue of the Irish e-cigarette market in 2023 was approximately 109 million euros, with an annual growth rate of 3.61% (CAGR 2023-2028).
In Ireland, the revenue per person in the e-cigarette market in 2023 is approximately 23.46 euros, taking into account the total population. As more smokers turn to e-cigarettes as a healthier alternative, Ireland's e-cigarette market has experienced a surge in popularity.
This year, significant legislative changes have been introduced within the category of electronic cigarettes. A bill prohibiting the sale of e-cigarettes to people under the age of 18 passed its final legislative phase on Tuesday, December 5th, in Seanard.
"For many years, Ireland has been lagging behind its European Union peers in restricting the sale of minors. Electronic cigarettes are limited to adult use only, and this legislation will play a key role in reducing the risk of minors coming into contact with these products," said David Melin, Country Manager of British American Tobacco Ireland.
The bill also includes a ban on e-cigarette advertising near schools and on public transportation, as well as the introduction of an estimated annual retail license fee of 500 euros per store.
Irish Finance Minister Michael McGrath has postponed the collection of e-cigarette taxes due to concerns that it may hinder smokers from using e-cigarettes to quit smoking.
Officials from the Ministry of Finance pointed out the need to find a balance between preventing young people from using e-cigarettes and supporting existing smokers to switch to e-cigarettes to quit smoking. According to media reports, health officials suggest taxing e-cigarettes based on their relative harm compared to traditional cigarettes.
McGrath stated that introducing a new e-cigarette tax would be "challenging". The government of the country plans to impose taxes on e-cigarettes as part of its public health response.
Michael Landl, Director of the World e-cigarette Federation, said, "We welcome the decision of the Minister of Finance and demand that the Irish government maintain a sufficiently large tax gap between e-cigarettes and traditional cigarettes in the future to incentivize smokers to switch. The risk profile of e-cigarette products is much lower than that of burning cigarettes and should be taxed accordingly. If the tax is approved, it will force tens of thousands of e-cigarette users to return to smoking."
The implementation of taxation has been postponed, and a new date has not yet been determined, while the government is also waiting for the EU framework to facilitate implementation. It is expected that the update of the EU Tobacco Tax Directive will include a consumption tax on electronic cigarette products within the EU.