Australia sees 80% of cigarettes from illegal sources, driving billions in tax losses

An analysis by the Australian Bureau of Statistics shows that about 80% of cigarettes and other nicotine products consumed in Australia last year were sourced illegally. The share of illicit tobacco rose from 12% in 2017 to a projected 80% by 2025, while overall nicotine consumption grew roughly 40% over the same period. The government is estimated to lose between $7.7 billion and $11.8 billion in excise revenue.

Legal tobacco prices have nearly tripled since 2016, with a 25‑cigarette pack now costing over $50, whereas illegal packs sell for about $25 and are largely imported from Asia and the Middle East. Criminologist James Martin of Deakin University called the situation “a huge policy failure that cannot be solved by repression.” The Albanese administration rejects calls to cut taxes, opting instead for stricter enforcement, while Finance Minister Jim Chalmers expressed doubt that tax reductions would achieve the desired effect.