Tobacco Stakeholder Group record of meeting, November 2015

Meeting details

Venue: ATO Office, 747 Collins Street, Docklands, Melbourne

Date: 12 November 2015

Start: 2.00pm, Finish: 4.30pm

Chair: Tom Wheeler

Secretariat: Rowena Troth

Contact Phone: (02) 4923 1444


Tom Wheeler


Scott Walker


Andrew McIver


Michael O'Rourke


Andreas Gianello


Elinor Kasapidis


Sasha Billett


Bryce Conolan


Rohan Pike


Gary Dickson

Imperial Tobacco Australia

Mariam Chizari

British American Tobacco Australia Ltd (BATA)

Rachel Drew

British American Tobacco Australia Ltd (BATA)

Saminda Fernando

British American Tobacco Australia Ltd (BATA)

Mark Powell

Philip Morris Limited

Michael Ritter-Leva

Philip Morris Limited

Murray Cranston

Philip Morris Limited

Rowena Troth

ATO - Secretariat

Guest Attendee:

Sean McGill

KPMG (Agenda Item 3)


Danni Bouris

Imperial Tobacco Australia

Patrick Muttart

Philip Morris Limited

Neville Matthew


Discussion Summary


The Tobacco Stakeholder Group agendas, minutes and related papers are not binding on the ATO, DIBP or the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change.

Agenda Item 1 - Welcome

Introductions, review of action items and previous minutes.

Outcome: The minutes of the previous meeting of 16 April 2015 were endorsed and there were no action items outstanding. No conflicts of interest were declared by members.

Agenda Item 2 - Agency updates

Australian Taxation Office (ATO) - Outcomes

Reinventing the ATO Update - Tom Wheeler

Members noted the update provided by Tom Wheeler regarding the recent Excise Payers client experience workshop held to consider what the tax system should look like in the future. Representatives from the tobacco, alcohol and petroleum sectors attended the workshop, and shared their views of current irritants and future desires. Tom also advised members of changes implemented to improve client's experience with the tax system since the last meeting.

Excise Modernisation Update - Michael O'Rourke

Michael thanked members for their input and assistance in understanding irritants and potential solutions / changes to streamline and simplify the excise and excise equivalent goods systems. He advised that the work was ongoing.

Tax Gap Update - Elinor Kasapidis

Elinor advised members that she will be working on the methodology for the tax gap work on approximately 16 tax products, including tobacco, with a view to publishing the information in the next ATO Annual Report for 2015/16. This forum will be consulted in future regarding the proposed methodology.

Public Advice and Guidance - Tom Wheeler

Members noted that the review of public advice and guidance for the ATO has been completed and that comments are now sought regarding the provision of private advice and guidance. Members have received separate correspondence about this with comments due by 20 November. The reviews are being carried out to better understand the needs of business.

Indexation of tobacco rates - Michael O'Rourke

Members received an update from Michael regarding the September indexation of tobacco duty rates, and associated quota process. The fourth announced increase of 12.5% plus indexation will take place in September 2016. There were no issues raised from industry and only one compliant was received by the ACCC which was from a retailer that they weren't receiving enough stock. Requests for quota adjustments were dealt with on a case-by-case basis. It was noted that next year the process is likely to only involve Customs duty quotas (not excise) as all product is expected to be imported. It was also noted for members that the Customs legislation is different, and any variations to Customs quotas must be within the declared period.

Tax Crime Update - Scott Walker

Members noted the update regarding the ATO's activities to combat domestic growing of illicit tobacco. Scott provided brief details on a recent seizure of 80 acres of illegally grown tobacco. There are a number of ongoing investigations and two convictions for tobacco-related offences. The ATO is interested in exploring opportunities and intelligence that industry might have around drivers for illicit tobacco.

Department of Immigration and Border Protection (DIBP) - Outcomes

Duty Drawback Update - Bryce Conolan

The Department has been looking into this issue since the last meeting. Officers have looked at data and options and will be discussing with industry out of session to gain a better understanding of some business processes.

Tobacco Reform Programme - Update - Sasha Billett

An Interdepartmental Committee (IDC) has been set up across the Commonwealth Government on Illicit Tobacco. The group has had its first meeting and will meet quarterly. DIBP chairs the IDC, which consists of representatives from the Attorney-General's Department, Treasury, the Australian Federal Police, the Australian Consumer and Competition Commission, the ATO, the Australian Crime Commission and the Department of Health.

Update on integration of the Department of Immigration and Border Protection - Sasha Billett

Members were reminded of the merger of the Australian Customs and Border Protection Service and Department of Immigration. From 1 July, the operational arm of the Department is the Australian Border Force (ABF). Secretary of the Department is Mike Pezzullo and the ABF Commissioner (and Comptroller-General of Customs) is Roman Quaedvlieg. The Department has a horizontal structureExternal Link.

The Department has a leading border protection role, with Prime Minister Turnbull having a particular focus on trade facilitation. A trade summit is being planned to be held in Melbourne and invitations will be sent to TSG members.

It was noted that a strategy on engagement with industry will be issued soon, and a program for trusted traders is being rolled out.

There is a central strategic command group with illicit tobacco being one of the 10 operational priorities, involving intelligence, enforcement and compliance action. DIBP intends to set up an industry advisory group with industry members from this forum, linked to the IDC, and members will receive an invitation in early 2016. Draft Terms of Reference are currently being developed for endorsement by the IDC. Industry noted the proposed formation of this group and welcomed the initiative.

Illicit Trade Enforcement Update - Rohan Pike

Members noted that Rohan was in the process of setting up a strike team on illicit tobacco which had been recently announced by the MinisterExternal Link. The strike team will be based in Melbourne but has national responsibility. ABF will be partnering with several other agencies to reinvent the way illicit tobacco is dealt with - including greater engagement with industry. Information for the strike force can be sent to link opens in a new window where emails will be handled in a timely manner.

Agenda Item 3 - Industry Items

KPMG Report on Illicit Tobacco in Australia

Sean McGill provided members with an overview of the report's methodology and recent findings, under embargo, ahead of its' public release next week.

Members noted the Chair's statement that the Commonwealth Government and this group do not officially endorse the report. Members were appreciative of the advance briefing.

Agenda Item 4 - Other Business

There was no other business.

The meeting concluded at 4.30pm.

    Last modified: 19 Jan 2016QC 47827