Encourage smoker quit by increasing tobacco excise and excise-equivalent customs duty by 5 per cent per year for 3 years from 1 September 2023, in addition to ordinary indexation.
The Government will encourage smokers to quit by increasing tobacco excise and excise-equivalent customs duty by 5 per cent per year for 3 years from 1 September 2023, in addition to ordinary indexation. The Government will also align the tax treatment of tobacco products subject to the per kilogram excise and excise-equivalent customs duty (such as roll-your-own tobacco) with the manufactured per-stick rate, by progressively lowering the 'equivalisation weight' from 0.7 to 0.6 grams. These progressive decreases will occur on 1 September each year from the per kilogram duty accordingly. The Government will expand compliance activity to address illicit tobacco and work with relevant agencies and state and territory governments to develop an appropriate multi-jurisdictional approach. This measure is estimated to increase receipts by $3.3 billion and increase GST payments to the states and territories by $290.0 million over the 5 years from 2022-23. These changes to tobacco excise are part of the Government's response to the National Tobacco Strategy and related initiatives on vaping and smoking prevention and cessation, and an enhanced regulatory approach to vaping.