KPMG report shows tobacco tax is too high

Tuesday, 26 May 2020

SYDNEY – The Australian Taxpayers’ Alliance today recommended policymakers take a second look at the high tobacco tax in light of the growing black market for tobacco. A KPMG report has revealed that illicit tobacco sales have jumped from 14.1 per cent of sales in 2018 to an astounding 20.7 per cent today.

“By regularly increasing the tobacco tax, policymakers hope to reduce smoking in Australia. But we have reached a tipping point and sales on the black market are becoming ever more profitable.”

“We have overused the tobacco tax to fight smoking and the market has adapted, becoming immune. The larger the black market the less control regulators have over tobacco products.”

“The increase in illegal tobacco sales proves a certain percentage of Australians are simply addicted to nicotine. While legal tobacco sales have dropped, the total number of sales has remained the same,” said ATA Policy Director Emilie Dye. “Instead of helping vulnerable people quit smoking, we are making them poorer.”

“For someone who first buys cigarettes and then worries about other necessities, it doesn’t matter how much Australia taxes. Rather than buying fewer ciggies, addicted smokers buy less of everything else.”

“If Australia’s politicians really want to help smokers quit, they have to stop increasing the tobacco tax. Every increase in the tobacco tax lines the pockets of black market cigarette dealers.”

Read the report here.

Quotes attributed to Emilie Dye, Policy Director for the Australian Taxpayers’ Alliance.

/Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length. View in full here.