Tobacco excise has passed a 'tipping point' and is fuelling black market
a year ago
- #black market
- #public health
- #tobacco excise
- Economists argue that regular tobacco excise increases are no longer reducing smoking rates but are fueling a black market.
- Suggestions include freezing or cutting the excise rate while Australia tackles illicit tobacco, though public health advocates warn against radical tax cuts.
- State and federal health ministers are set to meet, with NSW and Victoria pushing for excise cuts due to rising black market activity and crime.
- The excise rate has tripled over the past decade, making Australian cigarettes the most expensive in the developed world.
- About 20% of tobacco sold is illegal, and further excise hikes are not reducing smoking rates, according to experts.
- While excise taxes have halved smoking rates over two decades, they may have reached their limit in effectiveness.
- Federal excise receipts have plummeted from $16.3bn in 2019-20 to a forecasted $7.4bn this financial year.
- Border seizures of illegal tobacco have surged, indicating a booming black market.
- Federal officials rule out excise cuts, advocating instead for stronger compliance measures.
- Public health experts caution against industry influence, urging enforcement before considering excise adjustments.
- Experts debate whether the excise should focus on revenue or smoking reduction, given the black market's impact.
- Some propose a temporary radical excise reduction to curb illegal tobacco trade incentives.
- The excise rate increases biannually, with an additional 5% annual rise until 2026, making cigarettes increasingly unaffordable.