Show download pdf controls
  • Illicit tobacco

    Engaging in the illicit tobacco trade significantly deprives the community of taxes that are required to fund essential community services.

    Illicit tobacco trade includes but is not limited to:

    • the unlicensed production of tobacco plant or leaf
    • the unlicensed manufacture of tobacco products.

    Illicit tobacco includes cigarettes, cigars, loose tobacco and tobacco and leaf and plant matter that involve one or more of the following characteristics:

    • grown, manufactured and/or produced in Australia without an appropriate excise licence, even if the tobacco is intended for personal use
    • tobacco that is imported into the domestic market without customs duty being paid.

    Domestically grown tobacco

    It is illegal to grow tobacco in Australia without the appropriate excise licence. There is currently no legal tobacco manufacture occurring in Australia and no-one is licensed to grow tobacco for commercial sale or personal use.

    Involvement in domestic illicit tobacco production is a serious offence. This type of activity takes valuable government revenue from the community and places it in the hands of organised crime syndicates.

    In conjunction with our cross-agency partners, such as state and territory police, we manage the enforcement associated with domestically grown and manufactured illicit tobacco products.

    Signs that someone is growing tobacco

    Currently, a number of organised crime groups are targeting unsuspecting landowners, attempting to lease land to grow illicit tobacco.

    Signs that land is being used to grow, manufacture or produce illicit tobacco include:

    • intense labour production between September and June
    • unexplained source of loose tobacco
    • unexplained use of water resources
    • unexplained strong tobacco odour
    • large leaf plants that, depending on the size, may resemble kale, cabbage or corn and may have a pink flower growing on top
    • other suspicious activity that you suspect does not look right.

    Next step:

    • If you suspect that tobacco is being grown or manufactured in your community you can  

    Illicit Tobacco Taskforce

    On 1 July 2018, the Illicit Tobacco Taskforce (ITTF) was established as part of new reforms that will enhance the ATO and partner agencies' ability to protect Commonwealth revenue by proactively targeting, disrupting and dismantling serious organised crime syndicates that deal in illicit tobacco.

    This taskforce draws on the expertise and advanced capabilities of the ATO, Australian Border Force, Department of Home Affairs, the Australian Criminal Intelligence Commission, the Australian Transaction Reports and Analysis Centre, the Commonwealth Department of Public Prosecutions and law enforcement partners.

    The new taskforce under the consolidated power of these government agencies will help in the fight against organised international and local criminals that operate these multimillion dollar crime syndicates.

    Tobacco tax gap

    The tobacco tax gap is an estimate of how much tobacco excise and customs duty was actually collected, versus how much should have been collected if all taxpayers complied with the law.

    Estimates reveal that for the 2015-16 financial year, illicit tobacco cost the Australian community approximately $594  million in lost excise revenue. This equates to 5.6% of the amount of collectable tobacco excise. We are committed to reducing this gap.

    Tackling illicit tobacco

    We use a range of investigative and legislative approaches to disrupt illicit tobacco activity. These include:

    • gathering intelligence
    • conducting investigations
    • working with federal and state government agencies as part of investigations and intelligence sharing
    • identifying, seizing and destroying identified crops
    • collecting evidence as part of prosecution activity
    • using the Taxation Administration Act 1953, Excise Act 1901 and the Criminal Code Act 1995 to prosecute offenders.

    On 16 August 2018 the government passed the Treasury Laws Amendment (Illicit Tobacco Offences) BillExternal Link which creates a new tobacco offence regime. Penalties are set at a level to deter illegal activity and illicit tobacco manufacturers or producers face up to 10 years imprisonment and significant monetary penalties if caught.

    We have achieved several significant outcomes relating to the disruption and deterrence of illicit tobacco including custodial sentences of up to three years.

    Illicit tobacco enforcement results to date

    Financial year

    Operations

    KGs seized and destroyed

    Estimated excise duty ($m)

    Convictions

    2016-17

    15

    106,772

    $82.57

    Nil

    2017-18

    13

    98,470

    $89.98

    2

    2018-19

    2

    16,015

    $14.68

    2

    Total of all years

    30

    221,257

    $187.23

    4

    Note: You can confidentially report any suspicious behaviour to us or call 1800 060 062.

    Media releases

    See also:

    Last modified: 03 Dec 2018QC 54675