Illicit tobacco burns two billion in excise

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A new report shows illicit tobacco currently costs the Australian government up to $1.91 billion. According to KPMG LLP’s ‘Illicit Tobacco in Australia 2017 Full Year Report’, illegal tobacco – as a percentage of total tobacco consumption – rose from 14.3 per cent in 2016 to 15 per cent in 2017.

The report, commissioned by Philip Morris and Imperial Tobacco, also showed that volume of illicit tobacco consumption fell by one per cent in 2017, slower than the decline in legal consumption at 6.9 per cent.

Imperial Tobacco Australia’s Head of Corporate and Legal Affairs Rachel Elliott says a fully coordinated national illicit tobacco strategy is required to stop illegal products overtaking the market.

“The Australian Border Force, the Australian Taxation Office and other law enforcement agencies have made significant inroads into cracking down on and disrupting the organised crime groups involved,” she said.

“However, the industry believes a national anti-illicit tobacco strategy is needed to help coordinate industry and law enforcement efforts to ensure ongoing support for dealing with this serious criminal issue.”

Ms Elliott says Australia could learn from the UK’s National Anti-Illicit Tobacco Strategy introduced in 2000, which has reduced illicit cigarette sales from 22 per cent in 2000-01 to 10 per cent in 2013-14, resulting in a reduction in potential lost revenue from $6.12 billion (£3.4 billion) to $3.78 billion (£2.1 billion): HM Revenue & Customs, and Border Force – ‘Tackling Illicit Tobacco: From Leaf to Light’.

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