This year, the ATO has performed its traditional analysis on the total tobacco gap using the existing channel-based bottom-up method. However, preliminary data from a University of Queensland research project that is looking at the biomarkers of tobacco leaf consumption in samples of waste water throughout Australia suggests that the total tobacco market and therefore the total illicit market is significantly higher than what we have previously estimated.
With this information, we now assess this tobacco tax gap estimate as unreliable and are undertaking a review of the methodology. We caution using this information as it is no longer a sufficiently credible or meaningful estimate of the illicit tobacco market in Australia.
We are working closely with ITEC who are developing more comprehensive and consistent reporting on the size of both the illicit tobacco and e-cigarette markets and estimates of excise and excise equivalent customs duty evaded.