Tobacco Excise

Written by Claude Haiku 4.5 from the extracted text on 28 Feb 2026. It can miss or misread redacted and scanned pages. Check the source before relying on it.

This Treasury defensive briefing on tobacco excise presents competing estimates of illicit tobacco's revenue impact. A 2017 KPMG report commissioned by tobacco companies estimated illicit tobacco cost the government $1.91 billion in forgone revenue annually, with contraband accounting for 51.1 per cent of illicit consumption. However, Treasury's preferred estimate—derived from ATO and Home Affairs data using supply-side methodology endorsed by independent experts—places annual revenue loss at approximately $600 million. Treasury's talking points acknowledge excise's link to illicit market growth but emphasise that excise remains among the most effective smoking reduction interventions, with Australia's rates (53-62 per cent of retail price in 2017) still below WHO's recommended 70 per cent threshold. The document challenges KPMG's methodology, noting its empty packet analysis approach is prone to variance and fails to account for legitimate overseas imports and duty-free allow