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  • Trends and latest findings

    The gross gap continues to trend upwards for 2018–19 as the theoretical liability grows in line with estimated illicit tobacco imports and illegal domestic cultivation. The estimated net gap has decreased slightly in 2018–19, primarily as a result of increased amounts captured through international import seizures.

    Table 1 shows the tobacco duty reported, adjustments for compliance seizures, and the gross and net gap estimates from 2015–16 to 2018–19.

    Table 1: Tobacco tax gap, 2015–16 to 2018–19

    Element

    2015–16

    2016–17

    2017–18

    2018–19

    Gross gap ($m)

    676

    1,136

    1,332

    1,532

    Seizures of illicit tobacco ($m)

    135

    357

    470

    711

    Net gap ($m)

    542

    779

    862

    822

    Tax paid ($m)

    10,063

    10,969

    12,384

    12,858

    Theoretical liability ($m)

    10,604

    11,748

    13,246

    13,679

    Gross gap (%)

    6.4

    9.7

    10.1

    11.2

    Net gap (%)

    5.1

    6.6

    6.5

    6.0

    Figure 1 displays the same information as a chart.

    Figure 1: Gross and net tobacco tax gap percentages, 2015–16 to 2018–19

    Figure 1 shows the gross and net gap in percentage terms as outlined in Table 1.

    Note: The available quantity of illicit tobacco in Australia has fallen slightly over the past two years. The increase in tobacco duty rates create a situation where the tax gap is increasing, but the total volume of illicit tobacco in the market is falling slightly.

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      Last modified: 19 Oct 2020QC 55324