New laws to help stamp out illicit tobacco imports

The Australian government announced the commencement of new laws this week that will “protect Australia’s borders from the importation of smuggled tobacco products”.

The Assistant Minister for Customs, Community Safety and Multicultural Affairs Jason Wood says that the commencement of these new laws prohibit the importation of specified tobacco products without a permit and strengthen the customs duty framework for tobacco.

“From today [1 July], it is illegal for anyone to import tobacco without permission, or in contravention of permit conditions,” Mr Wood said.

“This will deter illicit trade in tobacco by providing the Australian Border Force with new enforcement options to seize tobacco and infringe tobacco smugglers. If you import tobacco without a permit or in breach of a permit condition, your tobacco may be destroyed, and you may face financial penalties or prosecution.”

Mr Wood notes that travelers arriving in Australia can continue to bring tobacco with them without a permit but must always declare tobacco above the duty-free allowance and pay any relevant duties and taxes.

Combating tobacco smuggling

Mr Wood says the government has also strengthened the duty framework for tobacco to better combat tobacco smuggling.

“From today [1 July], importers will have to pay all customs duties on tobacco when it is imported into Australia, rather than when it leaves a licensed customs warehouse,” he said.

Together, these measures are expected to target major sources of illicit tobacco entering the Australian market. They will “eliminate” the ability for organised crime to target licensed customs warehouses, which are estimated to be the source of almost a quarter of the illicit tobacco market in Australia.

Assistant Treasurer Michael Sukkar says combating illicit tobacco was an “important piece” of the government’s strategy to reduce the black economy in Australia.

“These measures deliver on the government’s Black Economy Package for combating illicit tobacco and protect the integrity of Australia’s tobacco excise system,” Mr Sukkar said.

“From 1 July 2018, this included the establishment of the multi-agency Illicit Tobacco Taskforce and additional funding to the Australian Taxation Office to detect and destroy domestically grown illicit tobacco crops.”

From 1 July 2018 to 31 May 2019, the Illicit Tobacco Taskforce is said to have seized over 140 million sticks and over 60 tonnes of loose-leaf tobacco. This represents over $180 million in evaded revenue.

The new legislation and 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.

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