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  • Vaping products are not tobacco products. They differ in terms of their content, use, effects and means of manufacture. As such, vaping products should be considered as an entirely separate category to tobacco products and should not be subject to excise.
  • Vaping products demonstrate a very successful less harmful alternative to smoking, which should be embraced and encouraged, not taxed or placed in the same bracket as smoking.[1]
  • Vaping is a fast-evolving category that is highly fragmented and it would be very difficult to yield tax due to the variation on devices, liquids and the large range of sources, manufacturers, importers, wholesalers, retailers and online (inside and outside the EU). Indeed, imposition of excise on vaping products sold in Ireland would give rise to unfair competition vis-à-vis online sellers outside the jurisdiction who make up an estimated 70% of the Irish market.
  • In a report to the European Union’s Council of Finance Ministers (ECOFIN) dated 12 January 2018 the European Commission concluded that “from a health perspective a cautious approach should be adopted towards a potential harmonized taxation of e-cigarettes”.[2] The Commission is now undergoing an external study to assess market data to “fill the information gap” and it would be premature for any excise be placed on vaping products in advance of the publication of that study.


Vape Business Ireland (VBI) is an alliance of businesses spanning the vaping product and e-liquid supply chain from manufacture to sale. VBI is committed to ensuring, in the context of national taxation and fiscal policy, that no policies are adopted at national level which unduly restrict the development of the market, nor give rise to unfair competition between SMEs active in Ireland and those selling online to Irish consumers from other EU Member States. VBI is of the view that the imposition of excise on vaping would in fact lead exactly to that scenario and as such we are opposed to the imposition of excise on vaping products in Budget 2019.

The Tobacco Products Directive (EU TPDII), which regulates ENDS in the EU, allows Member States to apply a ‘twin-track approach’ whereby vaping products can either be sold as a consumer electronic product or authorised as a medicinal product and therefore manufacturers must meet these specific standards. Applying excise to either a consumer electronic or licensed medicinal product would fly in the face of good policy making.

To justify why no excise should be imposed on vaping products, we note:

  1. Vaping products are not cigarettes and do not contain tobacco and therefore should not have an excise placed on them.

Vaping offers a legitimate, 95% less harmful alternative to smoking.[3] There are around 150,000 vaping product users in Ireland, of which 99% are ex-smokers according to the Department of Health’s Healthy Ireland survey.[4] In March 2017, the Health Information and Quality Authority (HIQA) published their Health Technology Assessment (HTA) of smoking cessation interventions which found that while the most popular cessation method is unassisted quitting (50%), quit attempts involving e-cigarettes were the second most popular option (29%).[5]

As well as that, the Institute of Economic Affairs (IEA) Discussion Paper on Understanding the Basic Economics of Tobacco Harm Reduction argues that an excise tax on vaping products would create a black market and would run contrary to not just normal policy ethics, but to the most fundamental ethics, that people should be free to make informed choices.[6]

Research published by Cancer Research UK on 7 February 2017, which is the first long-term study of the effects of vaping in ex-smokers, found that after six months, people who switched from cigarettes to vaping products had far fewer toxins and cancer-causing substances in their bodies than smokers.[7]  It is clear that vaping provides a huge benefit to those looking to quit smoking and therefore anything that would demotivate smokers from using vaping as an alternative, such as an excise tax, would be negative for ex-smokers and public health objectives of a Tobacco Free Ireland by 2025.


  1. Applying excise to vaping will damage legitimate and compliant businesses and undermine the 150,000 adult vapers in Ireland, of which 99% are ex-smokers.

The vaping market is still nascent and is therefore highly price-elastic, meaning that imposing excise would run a high risk of stifling its growth. VBI members estimate that the vaping sector already employs about 300 people directly in Ireland, with many more indirectly employed (retailers, distributors etc.). Due to the ease of cheap international cross-border online purchases, an excise is highly likely to push the consumer to purchase outside of Ireland. This is borne out by research conducted by Huang and Chaloupka, which found that a 10% increase in price reduces sales of disposable vaping products by approx. 12% and about 19% for reusable vaping products.[8] The European Commission’s Impact Assessment on the then possible revision of the Excise Directive stated that vaping excise tax could “lead to a price increase which might affect the choice of consumers”.[9] It should also be noted that in January 2018 the European Commission decided to commission a study on Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco earlier this year which will also analyse and report on the market developments of new products including vaping products.[10] It would be premature to impose an excise on the products until the study has been complete and the results are known.


  1. An excise regime would be costly to the State and businesses and difficult to administer due to the ability to purchase from many platforms across all markets.

On 15 February 2017, VBI responded to the EU public consultation on excise duties applied to manufactured tobacco in which we noted that many EU Member States, including UK, France, Germany, Spain and Belgium, among others, have decided against implementing an excise tax on vaping products due to the fact that they are not cigarettes and do not contain tobacco, as well as the difficulty other Member States have had with enforcement and the inability to capture online sales. It would also be difficult to establish a reliable tax base for vaping products due to the divisibility of the products into many separate components: nicotine, liquid tank, flavouring, heating element, battery etc. This year’s Tax Strategy Group paper ‘General Excise Paper – Alcohol Products Tax, Tobacco Products Tax, and Betting Duty’[11] also confirmed that the Revenue Commissioners “would be unable to use movement controls and tax warehousing for tax collection purposes” and “Consumers, retailers and suppliers would be free to buy the product from other EU Member States with no import formalities”.

When former Minister for Finance Michael Noonan was asked about a taxation on vaping products in 2015, he stated that “electronic cigarettes do not contain tobacco, and there is no combustion involved. Accordingly, neither e-cigarettes nor e-liquid fall under the harmonised regime for the taxation of tobacco products contained in the Tobacco Excise Directive (Directive 2011/64/EU).[12] He also stated that due to the large number of vaping products and liquids that are purchased online “it is difficult to estimate how large the market for such products is in Ireland”. We estimate that in Ireland around 40% of sales are online-based and this is an evolution that needs to be considered.


  1. If excise is placed on vaping products, which are consumer electronic products, then consideration must be given to placing excise on Nicotine Replacement Therapy (NRT) products.

Neither products contain tobacco, can assist those looking for an alternative to smoking and can contain nicotine. It should also be noted that reputable manufacturers use pharmaceutical grade nicotine in their vaping products, therefore being the exact same nicotine that is used in NRT products. Therefore, if excise is placed on vaping products, it must also be placed at the same rate on NRTs.

PHE and UK public health organisations such as ASH, British Lung Foundation and Cancer Research UK are also in agreement that vaping products are significantly less harmful than smoking[13]. In the UK, “more than 10 times as many people” are using vaping as a means to stop smoking than using local stop smoking services[14]. The Irish Government has signed up to a Tobacco Free Ireland with a very ambitious target of 5% adult smokers by 2025. Vaping can be a game changer in tobacco control and the opportunity to move the remaining 13% of smokers away from smoking must be seized.

To impose excise on the product is to undermine their potential to assist the State in achieving its 2025 Tobacco Free Ireland objectives.


The proposed licensing system for the sale of Non-Medicinal Nicotine Delivery Systems (NMNDS) within the Public Health (Sale of Tobacco Products and Non-Medicinal Nicotine Delivery Systems) Bill.


Finally, legislation currently being drafted by the Department of Health has the potential to increase the price of vaping products in Ireland. The stated objective of the Public Health (Sale of Tobacco Products and Non-Medicinal Nicotine Systems) Bill, in relation to vaping products, is to provide for the introduction of a licensing system for the sale of NMNDS. However, VBI does not support the introduction of a licensing system for the sale of vaping products because such a system goes beyond that required to track the sellers of vaping products and places an unnecessary continual administrative burden on the supply chain, while not being enforceable in an online environment. VBI would however support a once off registration system such as the registration system for owners of food establishments.


However, should the Bill provide for a licensing system which will place an ongoing financial and administrative burden on retailers selling vaping products through the introduction of a tobacco-type licensing system along with an excise, there is little doubt that some retailers will cease to sell vaping products and e-liquids. This flies in the face of providing adult smokers with alternatives to combustible tobacco products. Should a license fee for the sale of vaping products be introduced, it is most likely that the price of the consumer electronic product would have to increase in order to not impact the retailers’ bottom line. This will have a negative impact on the 150,000 users of vaping products in Ireland. To that end and in the context of this Bill, we ask that the Minister of Finance refrain from imposing an excise on vaping products in the upcoming budget.


VBI is keen to ensure that regulatory measures – such as a licensing system linked to a fee – neither unduly restricts the development of the market in Ireland nor creates unfair competition between SMEs active in this sector and those selling online to Irish consumers from other jurisdictions. An increase in cost for Irish manufacturers and retailers will cause consumers to purchase vaping products online, resulting in a loss of revenue for Irish SMEs.


[1] Public Health England, E-cigarettes around 95% less harmful than tobacco estimates landmark review https://www.gov.uk/government/news/e-cigarettes-around-95-less-harmful-than-tobacco-estimates-landmark-review

[2] Report from the Commission to the Council on Directive 2011/64/Eu on the structure and rates of excise duty applied to manufactured tobacco. https://vaporproductstax.com/wp-content/uploads/2018/01/EC-report_excise_duty_manufactured_tobacco_12012018_en.pdf

[3] See footnote 1.

[4] Healthy Ireland Survey 2017, Department of Health http://www.healthyireland.ie/wp-content/uploads/2017/10/Healthy-Ireland-Survey-Wave-3-Report-1.pdf

[5] HIQA, Health Technology Assessment (HTA) of smoking cessation interventions, March 2017 https://www.hiqa.ie/sites/default/files/2017-04/Smoking%20Cessation%20HTA.pdf

[6] IEA https://iea.org.uk/publications/understanding-the-basic-economics-of-tobacco-harm-reduction/

[7] Nicotine, Carcinogen, and Toxin Exposure in Long-Term E-Cigarette and Nicotine Replacement Therapy Users: A Cross-sectional Study http://annals.org/aim/article/2599869/nicotine-carcinogen-toxin-exposure-long-term-e-cigarette-nicotine-replacement

[8] Huang et al. The impact of price and tobacco control policies on the demand for electronic nicotine delivery systems (2014)

[9] Possible proposal for revision of Council Directive 2011/64/EU of 21 June 2011 on the structure and rates of excise duty applied to manufactured tobacco (June 2016)

[10] See footnote 2.

[11] Tax Strategy Group Paper, General Excise Paper – Alcohol Products Tax, Tobacco Products Tax, and Betting Duty, July 2018 https://www.finance.gov.ie/wp-content/uploads/2018/07/TSG-18-06-General-Excise-GK.pdf

[12] Parliamentary Question, 24 June 2015. https://www.kildarestreet.com/wrans/?id=2015-06-24a.238&s=excise+electronic+cigarettes+noonan#g240.r

[13] Healthy Ireland Survey (October 2016)

[14] E-cigarettes: a developing public health consensus (July 2016) https://www.gov.uk/government/publications/e-cigarettes-a-developing-public-health-consensus