Stocking up on cheaper cigarettes and alcohol on your holidays to avoid Ireland’s high excise duties may become a thing of the past under new rules the EU is eyeing up.
The European Commission launched a consultation yesterday on taxation of cross-border alcohol and tobacco purchases in the EU, investigating whether to bring in a policy that would force people to pay excise duties in their home country for alcohol and tobacco bought abroad.
Under current rules, if EU citizens buy alcohol or tobacco in other Member States, the person only pays excise duty in the country the purchases were made.
“For both alcohol and tobacco products, the misuse of cross-border shopping rules for private individuals is a source of concern for several EU countries due to lost revenues and the negative impact on the effectiveness of national public health policies,” the European Commission said in the consultation.
The review into existing policies has been launched to “ensure that they remain fit for purpose to balance the objectives of public revenues and health protection”.
It is believed that the rules in place at the moment could interfere with the EU’s campaign to deter young people from smoking and reduce instances of cancers related to the consumption of these intoxicants.
Ireland has some of the steepest excise duties on alcohol and tobacco in the EU, with VAT rates on both being raised significantly in successive Budgets.
These duties could, one could argue, be paying off, as most recent data from Eurostat indicates that Ireland has one of the lowest incidences of smoking in all of the EU.
Yet the drinks industry has frequently decried the fact that alcohol prices in Ireland are some of the highest in the region.
The Drinks Industry Group of Ireland has claimed that Ireland’s beer excise duty is more than 10 times that of Germany and that excises on spirits are more than four times that of Spain.
