A Coalition Taskforce report has recommended tobacco excise be slashed by at least 80 per cent to undercut the illicit trade run by organised crime.
The report includes a CPI graph showing tobacco excise has dramatically outpaced inflation in recent years. Stakeholder evidence cited in the report estimates illegal tobacco now accounts for up to 80 per cent of the Australian market and claims that 97 per cent of vapes consumed in the country are sourced from the black market.
The taskforce’s findings align with a recent NSW inquiry into the illicit tobacco trade and come ahead of a Senate Inquiry into the same issue, due to hand down its recommendations this Friday.
The Australian Association of Convenience Stores (AACS) has welcomed the report, with CEO Theo Foukkare saying it validated years of warnings from convenience retailers that excessive tax hikes were driving smokers out of legitimate stores.
“This report is a wake-up call. When up to 80 per cent of the tobacco market is illegal, no one can seriously claim the current policy is working.
“The graph tells the story. Tobacco tax has soared far beyond inflation, legal prices have exploded and organised crime has taken control of the market.”
Foukkare said the Coalition’s willingness to target the underlying cause of the black market, rather than relying solely on enforcement, was a welcome shift.
“It looks like everyone in Australia knows how to fix this problem, except for the Federal Labor Government.”
He said legitimate retailers were being penalised while criminal operators undercut them with illegal stock.
“AACS convenience stores follow the rules, pay their taxes and support their communities. Yet they are being forced to compete with criminals selling illegal products for a fraction of the price.
“Cutting excise will strike at the profits of organised crime, bring consumers back into the regulated market and give legitimate retailers a fighting chance to keep their doors open and their staff employed,” said Foukkare.
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