25 March 2019

New regulations to combat illicit tobacco imports


Joint media release with
The Hon Peter Dutton MP
Minister for Home Affairs

The Morrison Government is continuing the fight against illicit tobacco with new regulations introduced to combat the importation of smuggled tobacco products.

The Minister for Home Affairs Peter Dutton said from July 1 the new regulations will prohibit the importation of specified tobacco products without a permit issued by the Department of Home Affairs.

"It will be illegal for anyone to import tobacco without a permit or in contravention of permit conditions," Mr Dutton said.

"This will deter trade in illicit tobacco by providing the Australian Border Force with new enforcement options to seize illicit tobacco and tackle tobacco smugglers. Enforcement action may also be taken if import permit conditions are not followed."

The Government has also strengthened the duty framework for tobacco.
"From July 1 importers will have to pay all customs duties on tobacco when it is imported into the country, rather than when it leaves the warehouse," Mr Dutton said.

"Duty free stores and providores will still be able to offer duty free sales as previously. These tobacco products will be eligible for a refund of duties paid."

Together, these measures will remove a key source of illicit tobacco and reduce the incentive for organised crime to target licensed warehouses, with leakages estimated to be the source of almost a quarter of the illicit tobacco market in Australia.

Last year the Coalition established the Australian Border Force-led Illicit Tobacco Taskforce (ITTF) to investigate, prosecute and dismantle organised crime syndicates active in illicit tobacco importation and distribution.

Assistant Treasurer Stuart Robert said combatting illicit tobacco was an important piece of the Government's strategy to reduce the black economy in Australia.

"The measures form part of the illicit tobacco package announced in the 2018-19 Budget which are estimated to contribute $3.6 billion to the budget bottom line," Mr Robert said.
"Serious and organised crime syndicates are active in the supply of illicit tobacco and selling it wherever there is a market. Whether it is out of the back of a car or on a street corner.
Domestic illicit tobacco supply continues to be disrupted through effective work of the Australian Taxation Office.
"Since 1 July 2017 the ATO has seized 123 tonnes of illicit tobacco with estimated tobacco duty forgone of $114 million," Minister Robert said.
The new regulations build on the illicit tobacco offences legislation passed by Parliament last year, which included increasing the maximum penalty for illicit tobacco duty offences to 10 years imprisonment.

The new regulations can be found on the Federal Register of Legislation website, while further information on the measures can be found at the Australian Border Force website.