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Exchequer gets windfall due to plain packaging cigarettes

The latest exchequer returns show another increase in the tax take - thanks in part to the rules on...
TodayFM
TodayFM

5:19 PM - 4 Jul 2016



Exchequer gets windfall due to...

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Exchequer gets windfall due to plain packaging cigarettes

TodayFM
TodayFM

5:19 PM - 4 Jul 2016



The latest exchequer returns show another increase in the tax take - thanks in part to the rules on plain packaging of cigarettes.

Department of Finance officials believe a warehousing quirk is behind a €63 million bonanza in excise duty payments for June.

Tobacco companies will still be allowed to sell branded packages for a year after the plain packaging rules take effect, which is likely to be next January.

In order to flood the market before then, tobacco companies are packaging cigarettes early - making them liable for excise duty at the same time.

The gains are expected to pare back over the next year or so, as production slows down to allow the extra volume be sold off.

The June 2016 figures show overall tax income for the first half of the year is almost three-quarters of a billion euro higher than planned.

The figures as a whole paint a positive picture. While the State ran a deficit of €1.1 billion in the first half of 2016, this is almost €1.3 billion better off than the same period last year, once one-off factors are stripped out.

The sole blemish on the record is VAT, which comes in at €231 million lower than expected, although June not a VAT-paying month.

Corporation tax remains the star performer, coming in half a billion euro higher than planned, with the ongoing spike in payments still largely unexplained.



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