Reduce tobacco taxation to maximise revenue, says smokers' group

The smokers' group Forest Eireann has welcomed comments by a Fine Gael Senator highlighting the negative effect of increasing tobacco taxation in Ireland.

Speaking in the Seanad on Wednesday Senator Eugene Regan declared that, "In successive budgets the price of cigarettes and tobacco was raised to double that in the rest of Europe. The problem in this regard is that, apart from not succeeding in reducing the level of consumption of tobacco, an extraordinary illegal trade has been created from which criminal gangs and dissident republicans are benefiting. If we continue down this route and do not reverse the flawed policy followed in successive budgets, we will have a major problem in law enforcement".

John Mallon, spokesman for the smokers' group Forest Eireann, said: "Senator Regan is a Senior Counsel and an economist so his comments must be taken seriously. Artificially inflating the price of any legal product to ridiculous levels inevitably leads to the consumer finding alternative channels of supply, including criminal gangs.

"But this is not just an issue of law enforcement. Any further increase in tobacco taxation must lead to a further fall in revenue as more and more consumers take advantage of black market cigarettes and tobacco.

"Customs & Excise has suggested that 25% of tobacco consumed in Ireland is smuggled. If you add all those cigarettes imported legally from mainland Europe, the loss of revenue must be enormous.

"On behalf of the Irish taxpayer, smokers and non-smokers alike, we urge the Government to do the economically sensible thing and reduce tobacco taxation in order to maximise revenue and reduce the prevalence of illicit or counterfeit tobacco in Ireland."

Further comment

John Mallon (Forest Eireann) 085 219 3245

Comments

[Dave Atherton]

Tobacco smuggling in Ireland is rife and often involves organised crime with the Real IRA being one of the main beneficiaries. It is almost certainly true taxation both here and in the UK are on the downward slope of the Laffer Curve, whereby increased taxation leads to less revenue.

In some ways if Ireland corrects the taxation issue you will see the trade wither on the vine. However as an awful experiment Ireland could be seen where tobacco control finally ends, i.e. American Prohibtion and ClassA drugs where the USA has spent $1 trillion in the last 30 years in trying to stamp it out. The anti tobacco organisations will bear a heavy burden if this degree of lawlessness continues.

More worryingly from my perspective in the UK I was offered a packet of Russian cigarettes, which suggests that white van man will be replaced by more organised criminals in the UK. I did buy a packet purely for research reasons.

http://en.wikipedia.org/wiki/Laffer_curve

[Junican]

What is more worrying is that Tobacco Control has become so blinkered in the war that it is waging (GOOD (Tobacco Control) v BAD (Tobacco Companies), that it has lost sight of the fact that it is trying to deny the people FREE WILL. Advice and persuasion were one thing, but this all out attack on cost and supply has gone too far.

If free adults want to enjoy tobacco then that is their right. We must note that the attack upon tobacco companies and the use of social manipulation by price are not directly connected to Second Hand Smoke, therefore their use as a weapon is directed wholly at the FREE WILL of the people.