Card duty falls as cigarette prices climb

The old reliables:The tax on cigarettes is being increased with immediate effect, and the duty on credit and laser cards is to fall significantly, the Minister for Finance announced today.

But the Minister has left petrol and alcohol untouched in his fourth budget.

Cigarettes are to rise by 30 cent per packet of 20 from midnight tonight. "This increase serves to underline the desire of us all to curtail the consumption of tobacco in the interests of improved public health," Mr Cowen said.

"I believe this measure should be welcomed generally."

However, Ash Ireland said it was very disappointed with the small price increase. Ash said this approach ran totally contrary to the Government's policy of creating a tobacco-free society. It had sought a €2 increase on a pack of 20 cigarettes and related products.

"Price increase is established internationally as the single most important factor in encouraging smokers to quit and discouraging young people from experimenting with tobacco, Prof Luke Clancy of Ash Ireland said.

He said although major strides had been made by the Government to reduce the impact of tobacco on Irish society it was imperative that price, a major contributor to the reduction of smoking levels across all sectors of society, will continue to be used.

The Irish Cancer Society echoed Ash's concerns and expressed its disappointment and regret as it was seeking an increase of at least €2. It said  today's announcement only adjusted for inflation.

Mr Cowen announced an increase of 50 cents a packet in last year's budget.

There was no increase in the duty on alcohol announced, although Mr Cowen indicated he was considering serious changes to the tax system as it applies to alcohol in next year's budget.

There will be relief that a number of cuts in the duty payable on both credit and ATM cards are to be implemented.

The annual duty payable on credit cards will fall by 25 per cent from €40 to €30, while duty on "combined" debit/laser cards will be cut by 50 per cent from €20 to €10. The charge for ATM cards will also fall by 50 per cent from €10 to €5.

The Irish Banking Federation (IBF) welcomed the announcement and said the reduction represented "a welcome reduction in the cost unfairly borne by bank customers and a clear signal by Government of the importance of developing a modern payments system infrastructure".

Chambers Ireland chief executive John Dunne also welcomed the rebalancing of charges on credit cards and cheques. "This new policy direction - has been consistently called for by Chambers over the past number of years - will release significant efficiencies in the wider Irish economy."

Petrol and diesel prices have also been unaffected by this afternoon's budget, but there has been a significant increase in motor taxation rates.

The rate of tax as it applies to cars with an engine size of under 2.5 litres will increase by 9.5 per cent and 11 per cent for vehicles above that capacity from February 2008.