Government steps up fight against illicit tobacco

The first of two bills aimed at closing down the illicit-tobacco market was introduced into parliament last week.

The bill will see maximum penalties for excise offences increase to 10 years’ imprisonment and the potential for heavy fines for convictions in relation to offences involving commercial quantities of illicit tobacco – for example, up to $2.25 million where the tobacco weighs at least 500kg. The penalties will apply from the day after the bill receives royal assent.

These changes are supported by the Minister for Home Affairs, who will later introduce legislation to amend the Customs Act to strengthen illicit-tobacco offences, which will complement the above amendments.

The Minister for Revenue and Financial Services Kelly O’Dwyer says the government is delivering on the 2016-17 budget commitment to stop the illegal tobacco trade, which the Australian Taxation Office has identified as a major revenue source for organised crime.

“Under the current legislation, before charges can be laid under the Excise or Customs Act, the origin of the illegal tobacco seized in Australia has to be proven,” she said. “As the origin of tobacco cannot be readily determined, this obviously limits the ability to impose penalties, even where substantial quantities are involved.

“Furthermore, the current law has inconsistent penalties and limitations on how they can be applied.

“This measure will ensure tobacco products imported and consumed domestically are fully taxed and comply with Australian regulations.”

Master Grocers Australia CEO Jos de Bruin has welcomed the proactive initiative of the federal government in “taking a firm stand to help stamp out this serious and destructive illegal-tobacco market”.

“At last we have proposed laws that will rein in and punish the perpetrators of this ugly, damaging black market,” he said. “Let’s hope these new laws will bring an end to the destructive criminal elements that have grown in our society.

“Retailers, genuine suppliers and legitimate tobacco companies welcome the newly proposed legislation and we’re all thankful a positive step in the right direction has been made. We look forward to the bills receiving royal assent.”

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