An increase to the tax on vapes is being considered by Minister for Finance Simon Harris, with more than €22 million having been collected since it was introduced late last year.
The e-liquid products tax (EPT) became law in the 2024 Finance Act and came into effect on November 1st last.
The tax is set at €500 a litre, which works out at €1 for a 2ml vape. An increase is likely to be announced in Budget 2027, which is to be delivered on October 6th.
The Revenue Commissioners impose the tax on those who first supply e-liquid products in the State, mainly importers and manufacturers, in what is called the “first supply model”.
This is deemed the most efficient way to apply the tax given the large number of vape retailers. Some retailers who are wholesale importers also pay the tax.
Vapes are electronic devices that heat a liquid rather than burn tobacco. The liquid contains nicotine and flavourings to produce an inhalable aerosol used as an alternative to tobacco.
The Dáil and Seanad passed a law before the summer recess to clamp down on the industry and tackle the popularity of vapes among younger generations.
The Public Health (Single-Use Vapes) Act, which was signed into law by President Catherine Connolly, will ban the sale of disposable single-use vapes.
Health correspondent at The Irish Times, Shauna Bowers, explains the Government’s plan to ban single-use vapes and nicotine pouches. Video: Ronan McGreevy
The Public Health (Tobacco Products and Nicotine Inhaling Products) (Amendment) Bill, before the Seanad, will introduce a prohibition on flavoured vapes and restrict the packaging of vaping products from featuring colours and imagery.
A source close to Harris said he would give “serious consideration to any measures that help combat smoking or vaping”.
In a parliamentary reply to Sinn Féin TD Ann Graves, Harris said the tax is collected on a self-assessment basis and the “provisional yield” since its introduction last November had been more than €22 million.
Graves, a Dublin Fingal East TD, raised concerns about “non-compliant operators selling vaping products, including non-traditional retail outlets, such as phone shops, whose primary activity is not the sale of vaping products”.
She also asked about the impact on compliant sellers of vapes and the number of Revenue officials “assigned to compliance and enforcement activities relating to the e-liquid products tax”.
Graves’s questions followed concerns raised in June by the director general of the European Anti-Fraud Office, Petr Klement, who said Europe is being “flooded” by cheap vapes and e-cigarettes that often do not meet EU safety rules, dodge customs taxes and, in some cases, contain harmful and illegal substances.
A recent cross-Border investigation by the office, in co-operation with national authorities, seized 94 million vape products as part of a crackdown on the booming market.
The inquiry found fraudsters had used a range of schemes to misdeclare the goods when transporting or shipping them into the EU market and across internal borders, to avoid paying the correct rate of tax.
Harris said Revenue “selects cases for compliance intervention based on risk”. They “focus resources where they have greatest impact and to minimise the burden on compliant taxpayers”.
Some 2,000 of Revenue’s staff are engaged in activities “focused on targeting and confronting noncompliance across all taxes and duties” in co-operation with other State agencies.
The Minister told Graves “it is not possible to disaggregate staffing resources deployed exclusively to EPT compliance”.
Early last month, gardaí arrested two men and seized cannabis vapes and cannabis edibles, or gummies, valued at about €2 million.
Searches were carried out after gardaí became aware of retail premises, including vaping shops, selling illegal cannabis products.
The raids on five business premises and two houses in Castlebar, Longford, Drogheda and Carlow resulted in the seizure of “substantial quantities of cannabis-infused jellies, cannabis oil-infused vapes and ‘reefer’ cigarettes containing HHC and THC”.