The Government has no plans to change the tax rules which allow tobacco companies manufacturing in Ireland to benefit from a lower corporation tax rate, despite its stated anti-smoking policy.
The tobacco industry is a valuable source of revenue for the Government. It collected £680 million in excise tax from the industry last year. The 50p increase in the price of a packet of 20 cigarettes last December has also boosted the Government take.
In the first four months of this year, the Government took £128 million in duties from cigarettes, an 11 per cent increase on the corresponding period last year. This extra funding is being allocated to anti-smoking initiatives.
Manufacturing companies in Ireland benefit from a corporate tax rate of 10 per cent, as opposed to a standard rate of 24 per cent. A spokeswoman for the Department of Finance said the tax code could not differentiate between companies because of the goods they provided. Any change would conflict with EU regulations on harmonisation.
There are three leading tobacco manufacturers in Ireland: Gallahers, which manufactures Silk Cut and Benson and Hedges; John Player, which produces its own brand; and P.J. Carroll which manufactures Carrolls No 1, Major and Rothmans.
Three other companies manufacture tobacco products here but mainly for the export market. They are Villiger in Ballaghaderreen, Co Roscommon, Douwe Egberts in Mullingar, Co Westmeath, and Cadena in Waterford. These companies also benefit from the lower corporation tax rate.
Asked about this beneficial tax regime, a spokesman for the Irish Tobacco Manufacturing Advisory Committee pointed out that about 95 per cent of the cigarettes sold here were manufactured in Ireland. "Surely it is better that cigarettes sold here are manufactured here, rather than abroad," he said, pointing out that the tobacco industry employs about 1,000 people.
AFP adds: The World Health Organisation plans to target television and cinema in today's "World No Tobacco Day" to tackle the image of tobacco as "glamorous and fun".
"Tobacco is a communicated disease, communicated through advertising and promotion, for which the tobacco industry spends billions of dollars," the WHO director-general, Ms Gro Harlem Brundtland, said.
A "Tobacco Kills - Don't Be Duped" campaign includes posters and leaflets depicting two horse-riding cowboys, one telling the other "Bob, I've got cancer".
Some 11,000 people die daily from tobacco-related diseases, Ms Brundtland said, pointing out that research showed people's decision to smoke was influenced by tobacco industry promotion.
Bans on global advertising will be one of the first protocols negotiated by the WHO's 191 member-states working on the Framework Convention on Tobacco Control.
The WHO is to hold public hearings in Geneva in October ahead of talks to draw up the global treaty on tobacco control, due to be signed in 2003.
