Ruqayyah Snyder
Tobacco is illicit in Australia when it is grown, manufactured, or produced without a valid excise licence from the Australian Taxation Office (ATO). The excise licence and duty are integral to regulating tobacco production and supply in Australia and collecting revenue from the tobacco industry. Illicit tobacco is a serious offence in Australia, with significant legal and personal consequences. The Australian government treats the illicit tobacco trade seriously due to its impact on tax revenue and community funding, and those found guilty may face substantial penalties, including severe financial penalties and potential imprisonment.
| Characteristics | Values |
|---|---|
| Legality of growing tobacco in Australia | Illegal unless a valid excise licence is obtained from the Australian Taxation Office (ATO) |
| Tobacco as a source of revenue | Provides reliable source of revenue and jobs |
| Tobacco tax contribution to the government revenue | Contributed approximately 2.5% of total government revenue (approx. $A12.1 billion in 2019/20) |
| Average tax on a packet of cigarettes | Above 70% |
| Illicit tobacco | Tobacco grown, manufactured, or imported without a licence or without paying customs duty |
| Penalty for illicit tobacco | Civil penalty of 100 penalty units for possession of more than 2 kilograms of illicit tobacco |
| Penalty for selling illicit tobacco | Yes, there are penalties |
| Tobacco farming in the past | Yes, tobacco was grown in the Queensland border town of Texas |
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What You'll Learn
Growing tobacco in Australia is illegal without an excise licence
Tobacco is a significant source of revenue for the Australian government, with tobacco excise tax contributing approximately 2.5% of the total government revenue, or approximately $A12.1 billion in the 2019/2020 budget period. However, growing tobacco in Australia is illegal without a valid excise licence from the Australian Taxation Office (ATO).
To obtain an excise licence, applicants must meet strict requirements and adhere to specific conditions. The Australian Taxation Office rarely grants licences to grow tobacco and has strict criteria for doing so. The office may also require applicants to lodge a financial security to protect excise duty revenue.
The excise licence and duty are essential for regulating tobacco production and supply in Australia and collecting revenue from the tobacco industry. The Commonwealth treats illicit tobacco trading seriously, and those found guilty may face substantial penalties, including severe financial penalties and potential imprisonment.
If you are facing charges related to producing illicit tobacco or engaging in the illicit tobacco trade, it is essential to consult an experienced defence lawyer who understands the relevant legislation, including the Customs Act 1901, Taxation Administration Act 1953, and the Commonwealth Criminal Code.
It is important to note that, as of the time of writing, there is no legal tobacco manufacturing taking place in Australia, and no licences have been granted to grow or deal in tobacco seed, plant, or leaf, either for commercial sale or personal use.
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Tobacco was once big business in the Queensland town of Texas
The history of tobacco in Texas dates back to the 1870s when Chinese men were employed to grow the crop for local use. Chinese farmers first cultivated tobacco along the banks of the Dumaresq River, and much of the region's tobacco continued to be grown in the Dumaresq Valley. The crop was sown, cultivated, and harvested entirely by hand, requiring back-breaking work in Queensland's formidable summer heat. The Chinese farmers carried 10-gallon watering cans on a yoke across their shoulders to irrigate the thirsty plants.
The allure of Texas "gold leaf" tobacco was strong, and the industry thrived with the labour of migrants. Italian families settled in the area to run and work the tobacco farms. However, the work was challenging, and many Chinese tobacco farmers eventually died, leading their families to move away from Texas. Despite the hardships, the tobacco industry in Texas persisted, with the De Bortoli family continuing to grow tobacco on their farm until the industry's collapse in the 1990s.
The Australian government introduced deregulation in the 1990s, which led to the collapse of the tobacco industry. State and federal governments offered "exit grants" to tobacco farmers to encourage them to leave the industry. The De Bortoli family recalled being paid by the government to stop growing tobacco. As a result, tobacco farming in Texas came to an end, with cotton and cattle replacing the once-thriving tobacco crops in the Dumaresq Valley.
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Illicit tobacco is a serious tax crime
Tobacco is a significant source of revenue for the Australian government, with tobacco excise tax contributing approximately 2.5% of total government revenue (approximately $12.1 billion) in the 2019/2020 budget period. The Australian Taxation Office (ATO) and its partner agencies are committed to protecting this revenue stream by cracking down on illicit tobacco, which is a serious tax crime.
Illicit tobacco refers to tobacco that is grown, manufactured, or produced in Australia or imported into the domestic market without the required customs duty being paid. It also includes unlicensed tobacco production or the manufacture of tobacco products. The Australian government has tightened regulations on tobacco importation, requiring importers to obtain permits and pay applicable duties and taxes.
The ATO employs a range of investigative and legislative approaches to combat illicit tobacco. This includes conducting audits, seizing and destroying crops, collecting evidence, and prosecuting offenders under relevant legislation such as the Taxation Administration Act 1953, Excise Act 1901, and Criminal Code Act 1995. The Illicit Tobacco Taskforce (ITTF), established in 2018, enhances the ability of the ATO and its partners to detect, disrupt, and dismantle organised crime syndicates dealing in illicit tobacco.
The penalties for engaging in the illicit tobacco trade are severe and can include substantial financial penalties and imprisonment. For example, the civil penalty for possession of more than 2 kilograms of illicit tobacco is 100 penalty units (excluding personal use). Possession or sale of 5 kilograms or more can result in penalties of 200 penalty units or 5 times the amount of duty owed. As the penalties increase, so does the severity of punishment. Possession or sale of 500 kilograms or more can lead to 5 years of imprisonment and/or a penalty of 1000 penalty units or 5 times the amount of duty owed.
Illicit tobacco operations harm the Australian community by depriving it of valuable revenue and funding for essential community services. They also provide an unfair advantage to dishonest businesses. The ATO encourages community members to report suspected illicit tobacco activities to help dismantle these criminal networks and protect the interests of law-abiding citizens.
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Tobacco is highly subsidised in Australia
Tobacco is a significant source of revenue for the Australian government, and as such, it is subsidised. However, it is illegal to grow tobacco in Australia without a valid excise licence from the Australian Taxation Office (ATO). The excise licence and duty are integral to regulating tobacco production and supply in the country and collecting revenue from the tobacco industry.
The Australian government has implemented various measures to control the production, supply, and consumption of tobacco. These include excise tax, tobacco advertising bans, plain packaging laws, restrictions on smoking in public places, and age limits on purchasing tobacco. The government also established the Illicit Tobacco Taskforce (ITTF) in 2018 to combat the illicit tobacco trade and introduced tighter regulations on the tobacco importation process in 2019.
The tobacco excise tax contributed approximately 2.5% of the total government revenue, or approximately $A12.1 billion in the 2019/2020 budget period. On average, the tax on a packet of cigarettes, including GST, can reach above 70%, one of the highest levels in the developed world. The high taxation on tobacco products is intended to make them less affordable and thus reduce smoking rates and tobacco-related harm in the community.
The Australian government has also implemented the Public Health (Tobacco and Other Products) Act 2023, which mandates plain packaging for all tobacco products. This means that packaging must adhere to a specific colour scheme and cannot display logos, brand images, or promotional text. The Act also requires all tobacco products to display specific text and graphic health warnings.
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There are fears that unregulated tobacco could cause cancer
In Australia, growing tobacco without a valid excise licence from the Australian Taxation Office (ATO) is illegal. Tobacco and tobacco products, such as cigarettes, provide a significant and reliable source of revenue and jobs in the country. The tobacco excise tax, for instance, contributed approximately 2.5% of the total Government revenue, or about $A12.1 billion in the 2019/2020 budget period.
However, the unregulated tobacco trade is treated very seriously in Australia, with individuals facing substantial penalties, including severe financial penalties and potential imprisonment. This is because tobacco is known to cause cancer almost anywhere in the body. Tobacco smoke contains at least 70 chemicals that can cause cancer. These chemicals enter the bloodstream and are carried throughout the body, damaging DNA and causing cells to grow abnormally and turn into cancer.
Doctors have long known that smoking causes most lung cancers. Even today, with people smoking fewer cigarettes, the risk of lung cancer for smokers is higher than it was in 1964. This may be due to changes in the way cigarettes are made and the chemicals they contain. In addition to lung cancer, tobacco use has been linked to cancers of the larynx, oral cavity, pharynx, oesophagus, pancreas, bladder, stomach, colon, rectum, liver, cervix, kidney, and acute myeloid leukaemia.
Quitting smoking is the best way to prevent smoking-related cancers. Within 5-10 years of quitting, the chance of getting cancer of the mouth, throat, or voice box drops by half. Within 10 years, the risk of cancer of the bladder, oesophagus, or kidney decreases significantly. It is also important to avoid secondhand smoke, as more than 7,300 nonsmokers in the United States die each year from lung cancer caused by it.
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Frequently asked questions
Tobacco used to be grown in Australia, but currently, there is no legal tobacco manufacturing taking place in the country.
Tobacco growing in Australia became unprofitable due to market deregulation and the removal of government support. The industry slowly folded as government subsidies were cut.
Yes, growing tobacco in Australia is illegal unless you have a valid excise licence from the Australian Taxation Office (ATO). Tobacco is illicit when it is grown, manufactured, or produced in Australia without an excise licence or without paying customs duty.
Illicit tobacco cultivation and trading can result in severe financial penalties and potential imprisonment. Civil penalties for possession of illicit tobacco range from 100 penalty units to 5 years imprisonment and a fine of 1000 penalty units, depending on the quantity involved.
