CANBERRA, Dec. 12– The illicit tobacco trade is costing the Australian government billions of dollars every year in lost tax revenue, according to a new report.
The report from the federal government’s Illicit Tobacco and E-cigarette (ITEC) Commissioner estimated that half of all tobacco products sold in Australia are now illicit and that the e-cigarette market is predominantly operating outside health and regulatory safeguards.
It found that illicit tobacco sales evaded government taxes of up to 11.8 billion Australian dollars (about 7.86 billion U.S. dollars) in the financial year 2024-25.
The federal government collected 7.7 billion AUD in taxes on legal tobacco products in 2024-25, according to the report, down from 12.6 billion AUD in 2022-23 and 16.3 billion AUD in 2019-20.
A separate report published by the Australian Taxation Office (ATO) in October estimated that illicit tobacco accounted for 25 percent of the market in 2023-24 and evaded 3.2 billion AUD in taxes.
The ITEC Commissioner’s report said that illicit tobacco and e-cigarettes represent a threat to Australia’s public health, expose consumers to unregulated products and fuel organized crime.
“A clear view has emerged that there is no single solution to addressing the illicit market. Instead, a multi-pronged approach is needed across the ecosystem, from supply to demand,” ITEC Commissioner Amber Shuhyta wrote in the report.
“The wider Australian community also has a role to play, given normalization of consuming illicit tobacco and vapes directly supports serious and organized crime.”
Illicit tobacco and e-cigarette seizures by Australian authorities totalled a record-high of 2,244 tons in 2024-25, representing 56 percent of the 3,975 tons that were legally imported in the same period.
The seized volume of tobacco included 2.66 billion cigarettes. Australia’s excise duty on cigarettes, which increases in March and September each year, is currently set at 1.49 AUD per cigarette compared to 0.53 AUD per cigarette in December 2015. (Namibia Daily News/Xinhua)
