Budget 2008 - Excises

Tobacco Excise

The Excise Duty on a packet of 20 cigarettes is being increased by 30 cents (including VAT) with a pro-rata increase on other tobacco products, with effect from midnight on 5 December 2007.

The new rates are set out in the table hereunder:

Description of Product	Rate of Tax
Cigarettes	€160.57 per thousand together with an amount equal to 17.92% of the price at which the cigarettes are sold at retail
Cigars	€229.917 per kilogram
Fine-cut tobacco for the rolling of cigarettes	€194.016 per kilogram
Other smoking tobacco	€159.507 per kilogram

Alcohol Licensing Regime

Licensing fees for Off-licences are being increased from €250 per licence to €300 per licence with effect from 1 October 2008.

EU Tax Issue

Following discussions with the European Commission, the tax treatment of investment income and income attributable to the exercise of foreign employments outside the State will extend to the UK-sourced income. The Finance Bill will extend the relevant treatment from 1 January 2008.

Vehicle Registration Tax (VRT)

The current VRT system uses engine size as the criterion to determine the VRT rate to be applied to a car. Under the revised VRT system the CO2 emissions of a car will replace engine size as the criterion to determine the VRT rate payable on the car at point of registration. Lower emission cars will attract reduced VRT rates and higher emission cars will be liable to higher rates. The VRT rates will continue to be applied to the Open Market Selling Price of the car. The revised VRT system will take effect on 1 July 2008.

The following Table sets out the CO2 Emission Bands and the relevant VRT rates under the revised VRT system.

CO2 Emissions Bands	g CO2/km *	VRT Rates
A	0 - 120g	14%
B	121 - 140g	16%
C	141 - 155g	20%
D	156 - 170g	24%
E	171 - 190g	28%
F	191 - 225g	32%
G	226g and over	36%

* This refers to the amount of CO2 produced per kilometre by a car under certain test conditions. This amount is indicated for each model of car in its Certificate of Conformity.

The existing 50% VRT relief scheme for series production hybrid electric and flexible fuel cars, which is due to expire on 31 December 2007, is being extended to 30 June 2008. From 1 July 2008 the relief for these cars will be adjusted to give a relief of up to €2,500 on the VRT payable. This is in addition to any benefit accruing from the new VRT CO2 emission related banding.

With effect from 1 January 2008, series production electric cars and electric/battery-assisted cycles will be exempted from VRT for a period of three years.