Australia To Alter Tobacco Duties

Source from:  Tax-news.com 08/14/2017

The Australian parliament has passed legislation to ensure parity in the taxation of manufactured cigarettes and loose leaf tobacco.

Revenue Minister Kelly O'Dwyer said that a disparity currently occurs because the duty on cigarettes is a set amount per cigarette stick, based on an assumed 0.8 grams of tobacco. The duty on loose leaf tobacco is applied by reference to weight, at a rate per kilogram. O'Dwyer explained that, as the average stick cigarette contains less than 0.8 grams of tobacco, the current rate of duty on loose leaf tobacco is a lower effective rate than for stick cigarettes.

Under the new rules, the per kilogram tobacco duty rate will be based on the assumption that the average cigarette contains 0.7 grams of tobacco.

O'Dwyer said that the adjustment will increase the duty imposed on loose leaf tobacco over four years. The first adjustment will take place on September 1, 2017, with further annual adjustments to September 2020.

The Government expects the changes to deliver AUD360m (USD283.7m) to the Budget over the forward estimates period, and an additional AUD35m in GST revenue. Enditem