The Turnbull Government is continuing its crackdown on the illicit tobacco trade with the establishment of the Illicit Tobacco Taskforce, a new framework to protect tobacco duty, and further resources to combat illegal domestic production. The measures announced today are expected to increase revenue by $3.6 billion over the forward estimates.
The new multi-agency Illicit Tobacco Taskforce, to be led by the Australian Border Force (ABF), follows the marked success of the ABF’s Tobacco Strike Team and will bolster the government’s capability to enforce the new laws and dismantle illicit tobacco supply chains.
From 1 July 2019, importers will be required to pay all duty and tax liabilities when tobacco enters the country, rather than when it leaves a licensed warehouse and enters the domestic market. This will reduce the potential for leakage from warehouses to the black market. From this date, it will also be illegal to import tobacco without a permit.
The Government will also provide the Australian Taxation Office (ATO) with additional resources to fight domestic illicit tobacco and upgrade their entire excise systems, strengthening their ability to tackle illegal domestic tobacco crops.
Recent estimates from the ATO and the Department of Home Affairs reveal that almost $600 million in tobacco duty was foregone in 2015-16 financial year as a result of the trade in illicit tobacco.
The Minister for Revenue and Financial Services, Kelly O'Dwyer MP, said that the illicit tobacco market is dominated by organised crime groups, which use tobacco profits to fund their other criminal and black economy activities.
"These measures will shut down the avenues that organised crime syndicates have to access illicit tobacco to fund criminal activity," Minister O’Dwyer said.
"Increasing the resources for the ATO to combat illicit tobacco will continue the great work they have been able to achieve so far. Since July 2016, the ATO has undertaken 32 seizures totalling 215 tonnes of illicit tobacco with estimated tobacco duty forgone of $179 million,” Minister O’Dwyer said.
The Minister for Home Affairs, Peter Dutton MP, said that these measures ensure the Australian border is even more resilient to organised criminal groups that facilitate tobacco smuggling.
"Since 1 October 2015, the ABF Tobacco Strike Team seized almost 109 tonnes of smuggled tobacco and almost 248 million smuggled cigarettes. This is equivalent to $246 million in duty evaded," Minister Dutton said.
"The new Illicit Tobacco Taskforce will strengthen the ability of the Home Affairs portfolio agencies to investigate, prosecute and ultimately dismantle the criminal groups responsible for a large part of the illicit tobacco trade. We will continue to do all we can to disrupt illicit tobacco supply chains and deny these criminal groups access to illicit profits that undermine community safety."
Today’s announcement builds on the illicit tobacco offences legislation that was introduced to Parliament earlier this year, which included increasing the maximum penalty for some illicit tobacco duty offences to 10 years imprisonment.