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 Header Item Allocation of Time: Motion
 Header Item Financial Resolutions 2013
 Header Item Financial Resolution No. 1: Alcohol Products Tax
 Header Item Financial Resolution No. 2: Tobacco Products Tax

Wednesday, 5 December 2012

Dáil Éireann Debate
Vol. 785 No. 2

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Allocation of Time: Motion

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett I call on the Minister of State at the Department of the Taoiseach, Deputy Paul Kehoe, to move a motion in respect of the arrangements for dealing with the financial resolutions.

Minister of State at the Department of the Taoiseach (Deputy Paul Kehoe): Information on Paul Kehoe Zoom on Paul Kehoe I move:

   That, notwithstanding anything in Standing Orders, the financial motions by the Minister for Finance shall, for the purpose of debate, be grouped, moved and decided together in accordance with the following schedule and the proceedings thereon, and on any amendments thereto, shall, in the case of each resolution or group, as appropriate, be brought to a conclusion by one question which shall be put from the Chair not later than the times indicated as follows: Resolutions Nos. 1 and 2, to conclude after 20 minutes; Resolutions Nos. 3 to 5, inclusive, to conclude after 45 minutes; Resolution No. 6, to conclude after 20 minutes; Resolutions Nos. 7 to 9, inclusive, to conclude after 30 minutes; and Resolutions Nos. 10 to 14, inclusive, to conclude after 45 minutes."

  Question put and agreed to.

Financial Resolutions 2013

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny I move the following Financial Resolutions:

Financial Resolution No. 1: Alcohol Products Tax

The Taoiseach: Information on Enda Kenny Zoom on Enda Kenny (1) THAT for the purposes of the tax charged by virtue of section 75 of the Finance Act 2003 (No. 3 of 2003), that Act be amended, with effect as on and from 6 December 2012, by substituting the following for Schedule 2 to that Act (as amended by section 88 of the Finance Act 2010 (No. 5 of 2010)):



“SCHEDULE 2

Rates of Alcohol Products Tax

(With effect as on and from 6 December 2012)
Description of Product
Rate of Tax
Spirits: €36.85 per litre of alcohol in the spirits
Beer:  
Exceeding 0.5% vol but not exceeding 1.2% vol €0.00
Exceeding 1.2% vol but not exceeding 2.8% vol €9.56 per hectolitre per cent of alcohol in the beer
Exceeding 2.8% vol €19.13 per hectolitre per cent of alcohol in the beer
Wine:  
Still and sparkling, not exceeding 5.5% vol €123.51 per hectolitre
Still, exceeding 5.5% vol but not exceeding 15% vol €370.64 per hectolitre
Still, exceeding 15% vol €537.81 per hectolitre
Sparkling, exceeding 5.5% vol €741.28 per hectolitre
Other Fermented Beverages:  
(1) Cider and Perry:  
Still and sparkling, not exceeding 2.8% vol €40.08 per hectolitre
Still and sparkling, exceeding 2.8% vol but not exceeding 6.0% vol €80.16 per hectolitre
Still and sparkling, exceeding 6.0% vol but not exceeding 8.5% vol €185.36 per hectolitre
Still, exceeding 8.5% vol €262.92 per hectolitre
Sparkling, exceeding 8.5% vol €525.85 per hectolitre
(2) Other than Cider and Perry:  
Still and sparkling, not exceeding 5.5% vol €123.51 per hectolitre
Still, exceeding 5.5% vol €370.64 per hectolitre
Sparkling, exceeding 5.5% vol €741.28 per hectolitre
Intermediate Beverages:  
Still, not exceeding 15% vol €370.64 per hectolitre
Still, exceeding 15% vol €537.81 per hectolitre
Sparkling €741.28 per hectolitre
    (2) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Financial Resolution No. 2: Tobacco Products Tax

   (1) THAT for the purposes of the tax charged by virtue of section 72 of the Finance Act 2005 (No. 5 of 2005), that Act be amended, with effect as on and from 6 December 2012, by substituting the following for Schedule 2 to that Act (as amended by section 69 of the Finance Act 2012 (No.9 of 2012)):



"SCHEDULE 2

RATES OF TOBACCO PRODUCTS TAX

(With effect as on and from 6 December 2012)
Description of Product Rate of Tax
Cigarettes …. .... .... …. Rate of tax at­-

(a) except where paragraph (b) applies, €237.69 per thousand together with an amount equal to 8.83 per cent of the price at which the cigarettes are sold by retail, or

(b) €271.91 per thousand in respect of cigarettes sold by retail where the rate of tax would be less than that rate had the rate been calculated in accordance with paragraph (a).
Cigars .... .... .... …. Rate of tax at €275.342 per kilogram.
Fine-cut tobacco for the rolling of cigarettes .... .... .... .… Rate of tax at €248.608 per kilogram.
Other smoking tobacco .... …. Rate of tax at €191.022 per kilogram.
".
    (2) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

 Financial Resolution No.1 provides for increases with effect from midnight tonight in the rates of alcohol products taxed across the full range of alcohol products. The increases when VAT is included amount to €1 on a standard bottle of wine, 10 cent on a pint of beer, 10 cent on a pint of cider and 10 cent on a standard measure of spirits, with pro rata increases for other products. The expected yield from these increases is approximately €180 million in 2013 and a full year. The measures will increase the consumer price index by approximately 0.325%.

  Financial Resolution No. 2 provides for excise duty increases on tobacco products with effect from midnight tonight. The increase amounts to 10 cent, inclusive of VAT, on a pack of 20 cigarettes together with pro rata increases for other tobacco products. An additional 50 cent increase will apply to 25 g of roll-your-own, RYO, tobacco. The price of a pack of 20 cigarettes in the most popular price category will increase to €9.30. The excise duty component of this price will be €5.57 and the total tax, inclusive of VAT, will be €7.31. The increase on RYO amounts to an increase in total tax, inclusive of VAT, of approximately 60 cent per 25 g pack. The excise duty component of this increase will be 49 cent.

  The price and tax component of cigarettes in Ireland are among the highest in the EU. The high tax here reflects the long-standing commitment by successive Governments to use taxation as an instrument to discourage smoking. While consumption of RYO tobacco is relatively small by comparison, there has been something of a movement towards this product in recent years. The additional increase in the tax on RYO will bring the tax on that product more in line with that on cigarettes. These latest increases will ensure that tobacco tax continues to play an important role in discouraging consumption of tobacco products.

  Unfortunately, high prices and taxes also make Ireland an attractive location for cigarette smugglers. The Revenue Commissioners, who have responsibility for tobacco products tax, are very conscious of the threat that this poses to legitimate business and to the Exchequer and they continue to make tackling the problem a priority. Revenue has achieved notable successes in seizing illegal products and in bringing people involved in this criminality before the courts. This important work will continue.

  This measure is estimated to yield €25 million in a full year.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath Are we speaking to Financial Resolutions Nos. 1 and 2?

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett That is correct. I meant to mention we are discussing this in committee of the whole Dáil.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath In respect of Financial Resolution No. 1, my party is disappointed that the Government has not addressed the issue of alcohol sales in the off-licence trade. We made a number of proposals in that area in our submission.

As the Taoiseach will be aware, there has been a shift in sales from the on-licence trade to the off-licence trade in recent times and some of the promotions of alcohol in the off-licence trade are neither good for public health nor beneficial for the Exchequer in terms of revenue.

I expected that today's budget would have involved some move on the below-cost selling of alcohol in the off-licence trade. As the Taoiseach will be aware, the multiples are the main culprits in that area. There is scope for a levy in respect of the sale of alcohol in the off-licence trade. Instead, what the Taoiseach proposes here will penalise the on-licence trade. It is the wrong move at this time.

My party will oppose Financial Resolution No. 1, primarily on the grounds that the Minister for Finance has not addressed the issue of the blatant abuse of the sale of alcohol at enormous discounts in the off-licence trade, particularly in the multiples. I had expected that there would be some initiative in that area which would also have been beneficial for the State by way of revenue, but the Minister has not done that. Instead, he has gone back to the old reliable of merely putting it on to the price of a pint in the pub.

My leader wishes to speak on Financial Resolution No. 2 on which he has a track record.

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett I will come back to Deputy Martin.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty While Sinn Féin acknowledges that there are public health arguments behind each of these resolutions - the resolution that increases excise duty on alcohol products and the resolution that increases excise duty on tobacco products - we have been here previously. I do not want to rehearse the arguments that were made last year. The motivation of Government in this regard is not the public health interest of its citizens but to ask people to pay more because they either enjoy a pint at the weekend or because they are addicted to nicotine, and that is the reality of it. We need to call it as it is.

If the Government was motivated by the public health of these individuals, Sinn Féin might look at this in a different light, but that is not the case. The Government is not ring-fencing this money for addiction treatment or to help these individuals access health care that they need. Indeed, in the budget the Government has increased the charges for access to emergency care. On accessing medication, it has increased the drug payment scheme threshold for families who must pay a substantial amount for medication each month. For those who have a medical card, the Government has tripled the prescription charge. If the Government was genuine in this regard then one could look at these measures in a different light, but it is not.

If the Government was serious about tackling public health issues arising from alcohol and tobacco then it would not be stalling the implementation of the recommendations of the national task force. In light of what I have said, this is merely a money grab from citizens without any additional investment to benefit these individuals, either to wean themselves off their addiction to nicotine or to address the alcohol addiction issues in the State. In saying this I am not referring to everybody who goes out at the weekend to enjoy a pint as I myself enjoy a pint from time to time. If the Taoiseach was to come before me today stating that the increased yield of €180 million in excise duty on alcohol products was to be ring-fenced for addiction treatment centres right across the State, then we could be having a very different debate, but that is not what he is planning to do because that is not what is being proposed. This is merely about dipping into the pockets of ordinary people again. In that light, given that the Government is looking not at the health concerns of citizens but at another way of shaking a few extra euro from them, Sinn Féin will not support either of these resolutions.


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