Government Considers Vaping Tax Hike for Budget 2027 After Levy Raises €22 Million in Nine Months
Minister for Finance Simon Harris has signalled that an increase in Ireland's tax on vaping products is under active consideration for Budget 2027, after the E-liquid Products Tax — introduced in November 2025 — raised more than €22 million in its first nine months of operation, significantly exceeding initial projections and demonstrating both the scale of the vaping market and the revenue potential of further fiscal intervention.
Background
Ireland introduced the E-liquid Products Tax through the 2024 Finance Act, with the levy taking effect on November 1, 2025. The tax is applied at a rate of €500 per litre of e-liquid, which equates to approximately €1 for a standard 2ml vape. The Revenue Commissioners collect the tax using a "first supply model," imposing the levy on the initial suppliers — primarily manufacturers and importers — to ensure efficient collection across a retail landscape that includes thousands of outlets ranging from dedicated vape shops to convenience stores and petrol stations.
The introduction of the vaping tax was part of a broader government strategy to address the rapid growth of vaping, particularly among young people. Ireland has seen a significant increase in vaping rates over the past five years, with surveys suggesting that a substantial proportion of secondary school students have tried vaping and that regular use is becoming normalised among teenagers. Public health advocates have argued that the health risks of vaping — while generally considered lower than those of smoking — are not negligible, particularly for young people whose lungs are still developing.
The government's approach combines fiscal measures with legislative restrictions. The Public Health (Single-Use Vapes) Act bans the sale of disposable single-use vapes, which have been particularly popular among young people due to their low cost and wide availability. Additional legislation — the Public Health (Tobacco Products and Nicotine Inhaling Products) (Amendment) Bill — aims to prohibit flavoured vapes and restrict the use of specific colours and imagery on packaging, measures designed to reduce the appeal of vaping products to children and teenagers.
Key Developments
The €22 million raised by the E-liquid Products Tax in its first nine months has exceeded the government's initial projections, reflecting both the size of the Irish vaping market and the effectiveness of the first supply model in capturing revenue. Minister Harris has indicated that he will give serious consideration to measures aimed at combating smoking and vaping in the Budget 2027 process, with an increase in the EPT rate widely expected to be among the options under consideration.
Budget 2027 is scheduled for delivery on October 6, 2026. The government is under pressure to demonstrate fiscal discipline following warnings from the Irish Fiscal Advisory Council about budgetary overruns, but public health measures with clear revenue potential are generally easier to justify politically than other forms of tax increase.
Why It Matters
The vaping tax debate sits at the intersection of public health policy, fiscal strategy, and the regulation of a rapidly evolving consumer market. The evidence on the health effects of vaping is still developing, but there is growing consensus among public health researchers that the normalisation of vaping among young people represents a significant long-term health risk — both because of the direct effects of inhaling vaporised chemicals and because of the risk that vaping serves as a gateway to tobacco smoking.
The fiscal dimension is also significant. The €22 million raised in nine months suggests that a higher tax rate could generate substantial additional revenue — revenue that could be directed toward smoking cessation programmes, public health campaigns, or the general exchequer. The experience of tobacco taxation in Ireland, which has consistently demonstrated that higher taxes reduce consumption while generating revenue, provides a useful template for thinking about vaping taxation.
Local Impact
For the vaping industry in Ireland — which includes both domestic retailers and international manufacturers and importers — a tax increase would represent a significant additional cost burden. Industry representatives have argued that excessive taxation risks driving consumers toward illicit, unregulated products that pose greater health risks than compliant vapes. Revenue officials have acknowledged concerns about non-compliant operators and the influx of cheap, illicit vaping products into the EU market, and have indicated that enforcement will need to keep pace with any increase in the tax rate. For consumers, a higher tax would translate into higher prices at the point of sale — a deliberate policy choice designed to reduce consumption.
What's Next
Budget 2027 will be delivered on October 6, 2026, at which point the government's decisions on vaping taxation will be announced. The Public Health (Tobacco Products and Nicotine Inhaling Products) (Amendment) Bill is expected to progress through the Oireachtas in the autumn, with the flavoured vape ban and packaging restrictions likely to take effect in 2027. The Department of Health is also expected to publish updated data on vaping prevalence among young people in Ireland before the end of the year.
