The Drinks Industry Group of Ireland (DIGI) has called for a 15% reduction in the country’s excise tax rate over the next two years, RTÉ reported today.
DIGI called for the change to help thousands of Irish businesses across the country struggling with high costs.
In its pre-2025 Budget submission, DIGI called for a 7.5% reduction in the excise tax rate on drinks, with a further 7.5% reduction the following year.
The organisation noted that, if implemented, it would gradually bring Ireland’s tax rate in line with the average across other EU countries.
EU And UK Rates
DIGI also noted that, in addition to charging VAT on drinks, Ireland levies the second-highest overall tax rate in the UK and EU in the drinks industry, behind only Finland.
It added, ‘This is a self-imposed competitive disadvantage to Ireland’s drinks and hospitality sector.
‘The government takes a total of 30-35% of the retail price of every drink sold in excise and VAT.’
According to a recent survey by DIGI of almost 600 members – including rural publicans and restaurateurs around Ireland – almost one in four had seen his/her/their business costs increase by 20-30% in the last two years.
Some 15% said that their business costs had increased by over 40% in just the past two years alone.
In an increasingly difficult industry, an average of 114 pubs have closed annually since 2005, rising to an average of 144 annually between 2019 and 2023.
DIGI has noted that reducing the excise tax will offer immediate relief to businesses around the country, supporting the long-term sustainability of the hospitality sector.
In Ireland, consumers pay 55 cent in excise tax on a pint of beer, whereas Germans pay just five cent, and Irish consumers pay 80 cent in excise tax on a glass of wine, while French consumers pay a single cent.
DIGI added that 15 EU countries pay no excise on wine at all.
‘The Impact Would Be Felt Immediately’
The chair of DIGI and Irish Distillers’ communications and corporate affairs director, Kathryn D’Arcy, noted that more than a quarter of rural pubs have closed since 2005.
D’Arcy said that this highlights the need for meaningful strategic policy measures to safeguard the sustainability and growth of the sector.
She said, “We are calling for a reduction in Ireland’s excessively high excise tax rate as a crucial step towards aligning with UK and EU average rates.
“The impact would be felt immediately, lowering the tax burden for thousands of businesses across the country overnight, particularly in rural areas, where the high cost of doing business is felt most acutely.
“This is a policy that the government can easily implement and would send a strong signal of support to the sector, offering greater certainty around business costs in an increasingly uncertain time.”
Read More: Government Bans The Sale Of Tobacco Products At Children’s Events
