November 30, 2018: The Australasian Association of Convenience Stores (AACS) has lent its support to company tax cuts and the abolition of tobacco, alcohol and fuel excise proposed in a new Bill introduced by Liberal Democrat Senator David Leyonhjelm.
AACS CEO Jeff Rogut said huge taxes on select items like legal tobacco unfairly applies extra cost of living pressure to people from lower socio-economic backgrounds and effectively amounts to discrimination.
Excessive taxation also has significant negative impacts on small businesses like convenience stores, who miss out on lost legitimate sales as more and more consumers turn to the black market to make tobacco purchases.
“Law-abiding adults who choose to consumer legal tobacco have for too long been singled out and demonised by Governments through exorbitant excises. It has created an environment whereby Australia is one of the world’s most expensive markets for legal tobacco, which has of course given rise to the massive illicit tobacco problem we all now face in the community,” Mr Rogut said.
“This new Bill may be politically charged, but it also represents a fairer deal for consumers and small businesses, and an important counter to the criminal gangs profiting from the illicit tobacco trade.”
Illicit tobacco accounts for approximately 15% of tobacco consumed in Australia, according to the Illicit Tobacco in Australia 2017 Full Year Report produced by KPMG LLP, which means criminal gangs enjoy a huge amount of control of the total tobacco market as honest retailers suffer lost sales.
The Australian Government missed out on over $1.9 billion in tax revenue in 2017 as a result. And, as Senator Leyonhjelm said in introducing the Bill, “Smokers pay for the negative consequences of their habit many times over through exorbitant taxes.”
“Every time we make it more expensive for people to buy legal tobacco, we make it easier and more profitable for criminals involved in the illicit tobacco market trade,” Mr Rogut said.
Legal tobacco is a significant contributor to convenience profitability – representing around 38% of a typical store’s sales – and convenience store operators are trained responsible retailers of age-restricted products like tobacco. This will ideally soon extend to e-cigarettes – products which internationally have assisted in helping people to quit tobacco.
Further information:
Jeff Rogut
Chief Executive Officer
Australasian Association of Convenience Stores
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