Victoria's tobacco black market is not running out of puff as soaring federal tax excise is blamed for stoking the flames. or signup to continue reading A Labor-controlled inquiry estimated Victoria's tobacco market was worth $6 billion in 2023, as its was tabled in state parliament on Thursday. Up to 40 per cent of that could be made up of illegal cigarettes, vapes and other tobacco products based on varying estimates.
The Public Accounts and Estimates Committee inquiry found the higher tax excise had made legal tobacco "prohibitively expensive", coupled with inflation and cost‐of‐living pressures. It called for a fixed percentage of revenue from the Commonwealth's tobacco excise to be given to state and territory governments to support increased regulatory and enforcement activities. In May 2023, Federal Health Minister Mark Butler announced the tax on tobacco would five per cent each year for three years from September 1, 2023.
It's set to jump by 6.9 per cent on September 1, 2024, with the rate indexed to average weekly ordinary-time earnings. Branding it a move to deter people from smoking was "pure insanity" because it would incentivise smokers and vapers to buy from the black market, Australian Association of Convenience Stores chief executive Theo Foukkare said.
"(Victoria) is burning as illicit tobacco turf wars rage on and now we have the federal government quite literally adding fuel to the fire because of this short-sighted tax grab," he said. Several drivers .