IN A BOOST to the vaping industry, finance officials have played down the possibility of placing a tax on e-cigarettes in the upcoming budget.
At the moment VAT is paid on e-cigarettes, however they are not subject to excise duty, which is paid on regular cigarettes.
The Tax Strategy Group, a body of finance officials that is tasked with looking at the impact of taxes ahead of budgets, said that putting a levy on e-cigarettes would be difficult.
According to pre-budget tax documents published today, a 50c tax per 10ml of vaping liquid would yield €8.3 million per annum.
However, the tax group was broadly unenthusiastic about plans to put any tax on e-cigarettes on top of VAT.
“The implementation and collection of such a tax would be difficult given the wide variety of ways in which these products are supplied to the consumer,” the document said.
The group also noted that many sources “consider e-cigarettes to be a cessation tool” for those looking to give up smoking.
However it said opinions differ on e-cigarettes’ effectiveness and on their possible health impacts.
The fact that e-cigarettes don’t contain tobacco or harmful substances like tar that are associated with regular cigarette smoking has long been one of the arguments put forward as to why they should not be taxed in the same way as normal cigarettes.
While a UK health agency claimed last year that e-cigarettes could be up to 20 times safer than traditional tobacco cigarettes several bodies, including the World Health Organisation, have discouraged their use.
However, the tax body said that “many sources” consider e-cigarettes to be “certainly less harmful than cigarettes”.
The decision not to recommend the introduction of a tax was welcomed by Vape Business Ireland as a “progressive step”.
The industry group said that the move “should prompt other government departments to open up and discuss vaping as a growing and innovative sector”.
The move is a positive one for the industry after a European directive introduced last year effectively banned the advertising of e-cigarettes.