Consumer taxation

Issue 5: Taxation of sugar


Ibec recommends

No additional tax on soft drinks. Focus should be made on public health measures of proven efficacy such as product reformulation.


How Ireland will benefit

Jobs in the soft drinks sector will be protected and trade will not be lost across the border to Northern Ireland or to the grey/black market. Soft drinks companies will continue to invest in research and development on reformulation and new products which has far greater impact on public health than even the most optimistic projected impact of a soft drinks tax.



Issue 6: Alcohol excise

Ibec recommends

Irish excise taxes are among the highest in the developed world. It is unlikely that further excise increases will either significantly increase revenue or moderate consumption given the complicated and non-linear relationship between the two. If anything, Brexit may mean further excise increases will drive cross-border trade. The path toward reducing recent excise increases should begin in Budget 2017.


How Ireland will benefit


Excise is a doubly regressive tax in that it is charged regardless of income and it targets goods which are consumed in much greater quantities by lower income households. Ireland already has the highest alcohol prices in Europe and it is unlikely that increasing excise will raise significant further sums. In addition, alcohol use has fallen significantly in the past decade with further increases unlikely to change this but rather increase illicit trade.



Issue 7: The 9% tourism VAT rate


Ibec recommends

The 9% VAT rate should be retained as a permanent feature of the tax system. The tourism sector will need more support to ease it through a period which is likely to be particularly volatile.


How Ireland will benefit

The 9% VAT rate is a crucial support for an exporting industry which provides strong regional employment and is increasingly facing higher cost and competitiveness pressures from elsewhere.



Issue 8: Tobacco excise


Ibec recommends

No change in tobacco excise in 2017.


How Ireland will benefit

Irish tobacco excise is now beyond the point of diminishing marginal returns. Solid research and recent experience have suggested increasing it further will be at a cost rather than a benefit to the exchequer. Budgeting current spending increases based on increases in tobacco excise would represent wishful thinking at best.







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