Australia Hikes Cigarette Tax Amid Black Market Concerns

Tobacco Excise Jumps Nearly 7% as Experts and Politicians Question Price-Led Strategy

Cigarette prices in Australia, already among the highest in the world, are set to jump by nearly 7% on Monday due to a scheduled rise in the tobacco excise. This increase comes amid escalating criticism that the government’s price-led anti-smoking policy is fueling an explosive black market, which has been linked to a surge in violent crime, including robberies and arson attacks.

The Australian Taxation Office (ATO) estimates that one-fifth of all tobacco sales are now illegal. The new excise hike will see the tax on a 20-pack of cigarettes rise from $28.06 to $29.97. Independent economist Chris Richardson criticized the continued increases, likening it to “the definition of insanity” for making a “bad policy worse.”

The policy’s effectiveness is being questioned as government revenue from the tax has halved, from $14.3 billion in 2020-21 to an expected $7.1 billion this financial year, despite a near doubling of the tax rate in five years. NSW Premier Chris Minns has blamed high tobacco prices for the spike in violent crime and has previously called for a cut in the excise rate, a move dismissed by federal Treasurer Jim Chalmers.

While health experts like Professor Becky Freeman argue the focus should be on cracking down on illegal sales, states like NSW, Victoria, and South Australia are introducing tough new enforcement laws. The Australian Border Force also reported intercepting a near-record 2,091 tonnes of illicit tobacco and 6 million illicit vapes in the last year, highlighting the scale of the problem.

• Read more: Australia’s High Tobacco Tax Fuels Black Market, NSW Cracks Down
• News source: Cigarette prices to jump by almost 7% amid growing concern about Australia’s booming black market

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Matthew Ma

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With over a decade of experience in the e-cigarette industry, Matthew Ma is a seasoned expert in both the manufacturing and usage aspects of vaping products. His extensive background has provided him with a deep understanding of the intricacies and evolving dynamics of e-cigarettes.

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