Why do we raise excise on cigarettes?

ShooterSF

Ok some personal biases out of the way that I will be trying to avoid allow influence my thoughts. One I don't smoke, never have. Nothing to do with price I just find it a bit ick. Two I'm very keen on the idea of maximum personal liberty (until it infringes on someone elses).

With that out of the way as far as I can see increasing duty only opens up further usage of the black market. If we greatly reduced duty we would not only end the black market for cigarettes in the country but possibly also draw some "Fags tourism" from the north and UK with the motorway and cheap flights respectively.

Now there is an argument for health expenses but that never really sat with me. Surely people who die young fast are less expensive to the state than those that live to be old old pensioners? Anyway assuming that smokers DO cost the state more over their lifetime (I'm willing to concede that point for my example) a decrease in duty would bring more of them back into the tax net getting them paying something AND get duty from residents of other countries who will likely never rely on our state for their medical needs (the aforementioned UK folk) which could be used to subsidise the theoretical drop in duty from our residents (along with the drop in black market sales).

So is this idea really unworkable? I can't understand how no party suggests the opposite to hike the duty every time. Am I that far off with the idea that smarter economists can see through it?

nesf

Because we're muppets. We might as well just hand tax money over to the organised criminals that import smuggled cigarettes.

Fromthetrees

Plus, imo, the vast majority of smokers will smoke no matter, meaning smokers will get them illegally without a problem.

Arawn

addicts will pay for it.

meglome

nesf wrote: »

Because we're muppets. We might as well just hand tax money over to the organised criminals that import smuggled cigarettes.

I completely agree. I've always been I suppose what you'd call an anti-smoker but the level of tax on cigarettes has made them a commodity well worth smuggling. Really stupid decisions which will end up costing us money.

Arawn wrote: »

addicts will pay for it.

Oh they'll pay it... unfortunately to the guy selling them on the street or around work which we get no tax from and are likely to be much worse for them.

ShooterSF

Of course most will. But where they get it from is the issue. Leaving aside my belief that it's immoral to try and force them not to. Trying to keep it in the economics zone.

cson

It's a vice tax which from an economical standpoint serves to [a] reduce consumption and provide funds to combat the ills of the vice.

That's the rosy in the garden all-things-being-equal view. In reality we're probably close to the tipping point of diminishing returns and encouraging a black market/"fags tourism" as you so eloquently put it! The other reality is that by and large it won't have a major effect on consumption, if you wanted to do that you'd hike the price up to €20 a packet and you would see an effect but the tax revenues are so large it's in the interests of the Government to keep it near the tipping point.

It's easy for them to bang 20c onto a pack that's €8.20. It's a 2% increase, its not enough to stop people smoking and should in theory yield a higher tax return for them whilst at the same time it looks good politically for them.

TL;DR version: It's a penalty kick with no goalie of a tax for them to increase.

The sad thing is that **** all of the tax revenue generated will go towards [a] hospitals to cater for the effects of the consumption and anti smoking agencies/advertisements.

lestat21

So people like me can try to quit again

Also black market ciggies are worse for your health than the regular ones (according to some rte investigation - theyre always accurate).. I wouldn touch them!! I know loads of lads who had begun smoking rollies to save money thou

nesf

lestat21 wrote: »

I know loads of lads who had begun smoking rollies to save money thou

Like me, and very happy with the change.

ROCKMAN

lestat21 wrote: »

So people like me can try to quit again

Also black market ciggies are worse for your health than the regular ones (according to some rte investigation - theyre always accurate).. I wouldn touch them!! I know loads of lads who had begun smoking rollies to save money thou

Because 50g packs not on sale in Irish shops 99% of people smoking Rollies are getting them on the black market ,

Dannyboy83

At the current level of overpricing, 25c + Vat increase, it's probably not going to make that much of a difference - unless they break the psychological €9 barrier?
Presumably the people who pay the current rate will continue to pay the new rate?

TBH, even contraband have become unaffordable.
It was €4.50 to €5 per box for Polish or Lithuanian cigarettes in 2010, possibly higher now, which is insane when you consider that was roughly the price of Irish cigarettes when I started smoking.

You can get the Ukrainian/Russian stuff cheaper, but you've no idea what you're smoking there. Even the Romanian stuff was "off" imo. Gave me chest pains, sore throat when I smoked.

I had quit anyway but the price of contraband was a large motivating factor for my girlfriend in finally quitting, and she had never quit before, so I can't really imagine what it must be like for people paying the Irish rate. I mean, if you smoke a box per day, that's €3,285 per year from your Net income. Or - a years worth of car payments for a brand new car.

A lot of the people no longer bring them back from Eastern Europe, they know they'll be stopped and searched. They go to Spain/Gibraltar instead. Seems to be no searches done here.
I know a guy who brought 45 sleeves through recently which was a lot, but he does 20 on a regular basis. He told me he makes more money from wheeling/dealing cigarettes than he makes from his actual job. LOL!

Rabidlamb

There's figures online for 2008 vs 2011 where someone from Excise looks through the discarded empty packs after concerts & tallys the percentage of legit Irish duty paid smokes.
It used to be 1 in 5 packs were sourced outside the state, now it's 1 in 3.
As long as my Polish colleague doesn't put up his costs it's all rosey.
More & more people filling up with their duty free friends during the summer aswell.

Dellony25

ROCKMAN wrote: »

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Because 50g packs not on sale in Irish shops 99% of people smoking Rollies are getting them on the black market ,

Eh 50g packs are available in Ireland defiantly in one brand anyway!!

DoesNotCompute

Dannyboy83 wrote: »

You can get the Ukrainian/Russian stuff cheaper, but you've no idea what you're smoking there. Even the Romanian stuff was "off" imo. Gave me chest pains, sore throat when I smoked.

TBH, you don't really know what you're smoking anyway, even with the Irish stuff.

cson

ROCKMAN wrote: »

[/B]


Because 50g packs not on sale in Irish shops 99% of people smoking Rollies are getting them on the black market ,

Waiting patiently for a source on the 99% figure :P

youcancallmeal

ROCKMAN wrote: »

[/B]


Because 50g packs not on sale in Irish shops 99% of people smoking Rollies are getting them on the black market ,

I smoke rollies but not getting them on the black market. Whenever any friends or family are in central Europe or outside the EU I get them to bring me home tobacco. 50g pack lasts me over two weeks. I worked it out and I spend around €400-€500 a year smoking. Haven't bought tobacco in Ireland in about 4 years. I would say around 90% of my friends who smoked normal cigarettes for a long time have now given up. There were spedning a fortune on smoking, up to €2000 a year. Ironically most of them are spending their extra cash on weekends away in Europe and the likes.

Some things will never change and one of them is the ever increasing price of cigarettes in Ireland.

themadchef

I used to smoke 30 a day last year :eek: until i gave them up. I'd love to tell yee i notice the money in my pocket. Just gets swamped on other useless crap.

Anyway, getting to my point, and my point is, i never bought black market cigarettes. Not because i love my country or because my body is a temle (of doom) but because i simple couldint get me hands on them! No one round these rural parts selling the fecking things! So not everyone has the black market option. That makes it a smart mover for the government in a way most people are snookered. We have to buy the (Christ it must be nearly a tenner a pack now :eek:) excise paid option. No choice about it.

Besdes, those black market yolks are truly an awful smoke. If youre going to go the bother of smelling like that, spending your money and chasing cancer then for fúx sake, enjoy your smoke!! :P mmmm Benson (This was not a party political broadcast on behalf of the government:pac:)

nesf

ROCKMAN wrote: »

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Because 50g packs not on sale in Irish shops 99% of people smoking Rollies are getting them on the black market ,

You can get 50g Drum fairly easily if that's your thing. For 50g Samson etc you'll have to to Spain or similar all right.

Monife

With the VAT increase and the increase in Excise Duty, cigarettes will now cost around €9.10. As far as I am aware, we are either the 2nd or 3rd most expensive country in the world for cigarettes.

I for one will be switching to Pall Mall (cheaper brand) and sourcing them from Newry every 10 weeks (saving me €130 after deducting petrol cost (€20)).

ShooterSF

Some great examples there of people doing what it takes whether it be buying illegally or in other parts of the E.U. Then again some have said that they can't get access to the black market contraband and perhaps they're high taxes cover those that can. (Not condoning it btw, just want to look at the real life situation)

One thing I'm glad to see is the thread hasn't descended into smoker bashing (fingers crossed it stays that way). So is it that the government truly believes that high taxes on cigarettes will provide a greater return to revenue than lower or is it a vote winning measure or possibly a little from column A and a little from column B?
If it's the former I worry that our government are a little naive on the reality out there when devising their economic plans but if it's the latter is there no party out there that thinks it can win votes by promising to lower duty?

Jippohead

All the above seems generally right to me. I used to smoke rollies back in the day, the majority of my tobacco (perhaps 70-80%) used to be from my trips to Italy (I used to visit regularly for an ex, she would visit me with a few 50g bags too). If you use decent filters, hell of a better smoke IMHO.
Think I used to get some marlboros from mates who had traveled abroad (eastern european generally) but I never had a good feeling for them. Really bad chest etc.
Buying smokes in Ireland only happened when I was out on the razz and had to buy a pack in the pub/newsagents. For me (who was not a heavy smoker by any means), the price really made a difference. Hurts handing over the guts of a tenner like!

I really hate running out of tobacco and having to buy 20 fags on a night out. I have noticed a (small) rise in the amount of machines selling the 12.5gm box of Amber Leaf though.

I never get why the Govt tax the bejaysis out of cigarettes in this country though. Am I wrong in thinking there was a group challenging the price of cigarettes in Ireland in the EU courts?

skafish

With regard to the smuggling of cheap foreign stuff, if the government want to do somthing about it, the need to start by introducing realistic penalties for those caufgt smuggling

cson

ShooterSF wrote: »

So is it that the government truly believes that high taxes on cigarettes will provide a greater return to revenue than lower or is it a vote winning measure or possibly a little from column A and a little from column B?
If it's the former I worry that our government are a little naive on the reality out there when devising their economic plans but if it's the latter is there no party out there that thinks it can win votes by promising to lower duty?

It's both - they need the revenue and it looks politically good to be attempting to 'deal' with consumption.

It's very interesting from an Economic point of view - especially in relation to elasticity of demand. Quite a few studies on it if you're short on some light reading.

Re the latter point; it'd be political suicide. You'd probably get a rep as the 'craic' party.

Dannyboy83

Is there any other group in society who are persecuted in the manner that smokers are?

One thing which doesn't make a great deal of sense to me, is that there was no increase on the price of alcohol, yet we've been hearing how alcohol is "too cheap" for the last few months.
Alcohol is probably the most destructive drug in Ireland, perhaps with the exception of heroin, and it's definitely the most destructive legal drug.

There seems to be an understanding that alcoholics deserve sympathy, while it's ok to hate smokers.

Why would we continue to increase the price of cigarettes when we have a smuggling epidemic, yet leave alcohol unchanged, despite being much harder to smuggle?

krissovo

Where I work we travel around the EU a lot, as far as I recall there has not been an Irish purchased packet of ciggaretes in the office for 2 or 3 years now. They come from Germany, Poland, France and Spain so not blackmarket and it works out €4:50 or so a packet.

25 smokers smoking 20 a day is about €40k in lost revenue per year. If they were around €4:50 to €6 then I expect most us would go back to Irish smokes.

Park Royal

I do hope the government agencies are checking the alcohol in the Pubs ...

a few years back a large number of pubs were got with duff vodka for sale....

between duff petrol/ diesel and cigs coming across the boarder in regular

distribution patterns ........its a wonder there is any excise for the Government

at all , at all.....:rolleyes:

not to mention the duff tablets and medication......

guess its a case of buyer beware......but why are people in the motor trade

warning me off buying diesel in some garages,for fear my engine will be

ruined?