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Ireland’s Finance Minister Michael McGrath says a tax on vapes will be imposed from next year. It aims to help tackle the “insidious” practices of vape manufacturers targeting youth.
Government departments are working together to announce an vape tax in the next budget.
McGrath confirmed this in an interview on RTÉ’s Today with Claire Byrne Show. The Department of Finance has start to work with the Revenue to announce an vape tax in the next budget. And, the implementation will begin next year.
This is consistent with the announcement in last October’s budget that a tax on vapes and relating products would be introduced in Budget 2025.
Mr McGrath acknowledges that for some people, vaping products are a “more harmful to public health” way to quit smoking. But he also notes that the long-term effects of vapes are still unknown in general.
He says the tax proposed by the Department of Finance must be consistent with policies around vapes from other ministries. Such as the Health and Environment Ministries.
“What I’m doing is taking a comprehensive approach to consulting across Government to make sure there’s full policy alignments that are consistent in the policy position we adopt. But I do believe that that will result in a new tax being announced in the next budget, and introduced next year” he says.
tax on vapes in Ireland may influence vape retailing
Influence to the vape distributors and vape retailers
The vape tax in Ireland may have significant implications for vape distributors and retailers. It would increase the cost of vaping products. And, leading to consumer demand decrease and changes in purchasing behavior.
Besides, the tax could increase the cost of acquiring and distributing vaping products. They may need to reassess pricing strategies. What’s more, they may have to absorb some of the tax burden to remain competitive.
Also, the tax may also encourage some consumers to seek alternative purchasing channels. For example, online retailers from countries with lower or no vape taxes.
Influence to the vape manufacturers and companies in China
The a vape tax in Ireland will also impact vape manufacturers and companies in China.
On one hand, the tax could affect the demand for Chinese-manufactured vape products. Because the increasing prices resulting from the tax may lead to sales reduction. So, the Chinese vape manufacturers and vape companies need to reassess their pricing strategies to remain competitive in the Irish market.
On the other hand, the tax may create an opportunity for manufacturers in other countries with lower tax rates. They may gain a competitive advantages. Thus, Chinese manufacturers need to adapt the business strategies and explore alternative markets. By this way, they can mitigate the potential impact of the tax.
