A new report from the federal Illicit Tobacco and E-cigarette (ITEC) Commissioner says Australia may be losing up to A$11.8 billion (US$7.9 billion) a year in tax revenue to the illicit tobacco trade. The ITEC analysis estimates roughly half of all tobacco sold in Australia is illicit — though recent studies have placed the figure anywhere from 25% to 65% — and finds the e-cigarette market largely operating outside health and regulatory controls.

Revenue from legal tobacco has plunged: the government collected A$7.7 billion in 2024–25, down from A$12.6 billion in 2022–23 and A$16.3 billion in 2019–20. A separate Australian Taxation Office report put the illicit market share at 25% in 2023–24, with about A$3.2 billion in taxes evaded. ITEC warns the problem is growing and increasingly driven by organised crime.

Enforcement figures underline the scale: authorities seized a record 2,244 tonnes of illicit tobacco and e-cigarettes in 2024–25 — including 2.7 billion cigarettes, equivalent to 56% of legally imported tobacco. ITEC Commissioner Amber Shuhyta is calling for a multi-pronged response, noting that Australia’s steep cigarette excise — now A$1.49 per cigarette, up from A$0.53 in 2015 — has helped fuel the illicit market.

This article was adapted from an original report published on tobaccoreporter.com. All rights belong to the original publisher.