As illicit tobacco sales rise into the billions, economist Arthur Laffer puts blame on high tobacco taxation rate
October 15, 2025 by abc.net.au
As illicit tobacco sales rise into the billions, economist Arthur Laffer puts blame on high tobacco taxation rate
Internal tobacco industry data suggest that illicit tobacco now accounts for 64% of all tobacco and 82% of total nicotine consumed in Australia. As of September, the black market is estimated to be worth nearly $10 billion. This surge in illegal tobacco use has caused federal tobacco excise revenue to plummet—from over $16 billion in 2020 to $7.4 billion in 2025—with further declines expected. In addition, the federal tobacco excise increased by another 5% last month, on top of regular indexation.
11.00% of the adult population are current smokers. There are approximately 2.4 million current smokers in Australia 12.90% of men are current smokers but only 9.30% of women.
SOURCE: GSTHR
