Businesses don’t tend to lobby for higher excise duty on their own products. But tobacco firms don’t fall into the category of typical firms.
Because tobacco is a public health nuisance, increasing the duty on cigarettes is perhaps the least-controversial measure a minister for finance can announce on budget day.
A minimum 50-cent increase in excise duty on cigarettes has been announced in each of the past 10 budgets. In Budget 2025, the hike was €1. Tobacco firms are the minister’s whipping boys. And they can’t exactly complain.
Instead, the sector retreats into the narrative that too much tax pushes consumers into the arms of the illegal cigarette smugglers.
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A case in point is tobacco distributor JTI Ireland, whose brands include Benson & Hedges, Silk Cut and Camel.
In a pre-budget submission, the company calls for a 25c increase in excise duty on a packet of 20 cigarettes as a way of keeping sales stable and the illicit trade in check while also delivering for the exchequer.
The increase would yield the exchequer an additional €45 million, JTI says.
“A €0.25 increase in TPT (tobacco products tax) represents the optimal option to deliver a stable and positive return to the exchequer, while limiting further displacement into illicit supply," it said.
JTI claims that a hefty 39.5 per cent of tobacco products consumed in Ireland generated zero Irish tax revenue last year, up from 22 per cent in 2021.
What that means in practice is a significant portion of cigarettes here are either brought in legally from abroad (duty free or duty paid) or are part of the black market in products or counterfeit products.
JTI claims the exchequer is losing more than €1 billion in excise and VAT as a result.
Will the Minister for Finance Simon Harris take the argument on board? Unlikely, if the past 10 budgets are anything to go by.
