House of Representatives

Customs Amendment (Collecting Tobacco Duties at the Border) Bill 2018

Second Reading Speech

Mr COLEMAN (Banks-Minister for Immigration, Citizenship and Multicultural Affairs)

I move:

That this bill be now read a second time.

The Australian government is committed to combating the illicit tobacco black market.

In October 2017 the Black Economy Taskforce delivered their final report to government. The 2018-19 budget Black Economy Package-combatting illicit tobacco gives effect to the report's recommendations, including establishing a new framework to protect tobacco duty, a permit system to import tobacco and the Australian Border Force led Illicit Tobacco Taskforce.

Together these measures will disrupt illicit tobacco supply chains and deny criminal groups access to illicit profits that fund their other criminal and black economy activities.

To give effect to the new framework to protect tobacco duty, the government is introducing the Customs Amendment (Collecting Tobacco Duties at the Border) Bill.

Current legislation allows duties on tobacco to be paid at the point that tobacco products leave licensed warehouses as well as when it is imported. Leakage from these warehouses to the black market contributes to around a quarter of illicit tobacco in Australia.

From 1 July 2019, tobacco importers will be required to pay all duties on tobacco upon importation. From that date, the option to enter imported tobacco into a licensed warehouse and delay the payment of duties will no longer be available. This will deny criminal groups the opportunity to defraud the Commonwealth of revenue that secures essential services for all Australians, prevent criminals from undermining government strategies to improve public health outcomes and protect law-abiding local business operators.

The bill will also include transitional arrangements for the treatment of tobacco that is in warehouses at 1 July 2019.

By tackling black economy activities in the tobacco-warehousing environment, the government will protect Australian revenue, protect the health of Australians, reduce criminal activity and provide an estimated $3.3 billion in revenue to the Commonwealth. I commend the bill to the House.

Debate adjourned.

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