Tax on vapes and e-cigarettes to be introduced in October's budget
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Work is under way to introduce a tax on vapes and e-cigarettes from next year, the Finance Minister has confirmed.
Jack Chambers has also strongly suggested the inheritance tax will be changed as part of October's budget, however, it is now unlikely the special 9% Vat rate which had been in place for the hospitality sector will be reintroduced.
Asked about a commitment to introduce a tax on e-cigarettes from next year, Mr Chambers said his department was working on the "finer details" of a levy on vapes with Revenue.
"It's our intention to make progress on that in this year's budget. There's work ongoing between Revenue and the Department of Finance and how we can operationalise that and obviously I'll be able to set out further information on budget day.
He added: "The details and the technicalities are being worked through on how we can make that possible for 2025."
However, he said a decision on increasing tax on cigarettes had yet to be made.
The minister has strongly indicated that:
- The 9% Vat rate on gas and electricity will remain in place across the winter to help people with the cost of living;
- Changes to inheritance tax will be introduced to take account of rising house prices;
- There will be reductions in income tax through changes to the thresholds of entering the higher rate;
- A significant increase for pensioners is on the cards.
Mr Chambers said there would be a "very substantial package of support for pensioners, and indeed, for those least well off in our society".
Pressed on whether the 9% Vat rate on gas and electricity, which was introduced to help support households when prices soared in the wake of Russia'a invasion of Ukraine would remain, Mr Chambers said: "I fully understand that for many families the cost of living is still a central issue and despite the flat rate of inflation being at about 1.5% in June and July, prices haven't fallen for many families, whether it's groceries, in energy and across different price dynamics of our economy.
"That's why cost of living will be a central consideration in how we frame Budget 2025. Part of that last year was the Vat reduction on energy, that will be considered in the context of budget 2025, particularly during the winter period and how we can continue to support families during that time."