The Dublin Chamber of Commerce has criticised the call by the Office of Tobacco Control to increase the price of cigarettes by 100 per cent.
The Chamber said this would be counter productive and lead to a rise in criminal activity and lost revenues for the Government.
Chamber Policy Director Mr Declan Martin, said despite substantial tax increase on tobacco in recent years there was no evidence these taxes had any significant effect on consumption. If anything, he said, consumption had been increasing, despite higher taxes.
According to the Chamber, tobacco consumption is a lifestyle issue and price was not necessarily the key factor in the consumption decision.
"A doubling of tobacco price through taxation would almost certainly give rise to illegal smuggling and sale of tobacco products," Mr Martin said.
"This would lead to a rise in criminal activity and a substantial weakening of the legitimate market for tobacco, including the controls in place to prevent sales to underage people.
"There would also be significant losses to the Exchequer from lost excises taxes, as well as job losses in the legitimate trade."
Evidence from the UK has shown the substantial price differences between UK and mainland EU has given rise to tobacco smuggling, which is now estimated to account for about 30 per cent of the tobacco market, he said.
EU Commissioner Mr Frits Bolkestein, recently called on the UK Government to reduce excise taxes on tobacco to stop this illegal activity.
The loss to the UK Exchequer every year is estimated to be in the order of Stg£3bn.