Committee Reports > List of Committees > Joint > 1976 > Committee on the Secondary Legislation of the European Communities > Report No. 41 - Tobacco, Taxes Affecting Consumption

IMEACHTAÍ AN CHOMCHOISTE

PROCEEDINGS OF THE JOINT COMMITTEE

Dé Céadaoin, 30 Meitheamh, 1976

Wednesday, 30th June, 1976

1. The Joint Committee met at 4.30 p.m.

2. Members Present.

The following members were present:

Deputies Haughey (in the Chair), Esmonde, McDonald and Nolan; Senators Higgins, Lenihan, Robinson and Yeats. Apologies for inability to attend were received from Deputy Dockrell and from Senator FitzGerald.

3. Draft Report on Proposed Fifth Council Directive on Taxes other than Turnover Taxes which affect the Consumption of Manufactured Tabacco.

The Chairman brought forward a Draft Report which was read as follows:—

(i) Paragraphs 1 to 6, inclusive, agreed to.

(ii) Paragraph 7.

Amendment proposed (Deputy Esmonde):

“At the beginning of the second sub-paragraph to insert the following ‘While the Irish cigarette industry is seeking an early decision on the final tax structure it has made it clear to the Joint Committee that it does not welcome the proposed changes though it accepts that some changes are inevitable. The proposed tax structure will entail heavy and exceptional capital and marketing investment which could affect employment. However the industry is confident that it can remain viable and can compete provided that the proportional element of taxation does not dominate’”.

Amendment agreed to.

Amendment proposed (Deputy Esmonde):

“After the second sub-paragraph to insert the following new sub-paragraph ‘ITMAC believes that failure to negotiate an acceptable tax structure could have serious consequences for the Irish industry. To attempt to counteract an unfavourable system of taxation by developing low-cost products for which the industry has no established skill and no market reputation would involve heavy additional investment in re-training and re-equipment. In a small market cost penalties which arise from a change in the tax system and are not material to competitiveness would deter investment and favour importation from longer run producers. The Irish industry could find itself unable to compete with Continental producers who enjoy cost advantages from a protected position in a large domestic market. Moreover, a high proportion of the proportional element of taxation could induce increasing import penetration of the United Kingdom market thus creating spare United Kingdom capacity for the production of cigarettes which is now being undertaken on contract in Ireland thereby reducing Irish exports’”.

Amendment agreed to.

Paragraph, as amended, agreed to.

(iii) Paragraph 8 agreed to.

Draft Report, as amended, agreed to.

Ordered: To report accordingly.

4. Adjournment.

The Joint Committee adjourned at 6.20 p.m.