Australia Senate proposes tobacco tax freeze to combat black market

A Senate committee in Australia has proposed freezing tobacco excise taxes and liberalizing the sale of e-cigarettes to combat a surging illicit market. According to data from the Australian Bureau of Statistics, illegal sources accounted for 80% of nicotine consumption in the country in 2025, a significant increase from 12% in 2017.

The committee, which holds a Liberal majority, recommends adopting a policy model similar to New Zealand. This approach would allow for the legal, regulated sale of nicotine-containing e-cigarettes and other non-combustible nicotine products as less harmful alternatives for smokers.

The proposal has sparked political division. While the retail sector has welcomed the recommendations, the government has rejected immediate tax reductions, describing the report as a “coup monté” (setup) by the Liberal opposition.