Cigarette prices spike as new taxes come into effect today
Excises have skyrocketed from 46c to almost $1.50 per cigarette over the last decade.
Tobacco products are more expensive today than they were yesterday, with the tax charged on an individual cigarette jumping by almost 10 cents.
But Australians shouldn't be surprised by the price hike, given it happens twice a year.
Under Australian law, the cost of tobacco products increases every March and September to reflect the regular rise of excise duty rates.
From today, the excise on tobacco rose by 6.8 per cent.
That means the tax on cigarettes in stick form not exceeding 0.8 grams of actual tobacco content per stick jumped from $1.40 to $1.49.
That means the tax for a pack of 20 cigarettes will rise from $28.06 to $29.97.
The excise on tobacco products not in stick form, or in stick form exceeding 0.8 grams of actual tobacco content per stick rose from $2158.65 per kilo of tobacco content to $2397.31.
That's a price hike of almost $240.
Blended tobacco goods are also subject to new duty rates, the amount of which is calculated under section 6AAC of Australia's excise guidelines for the tobacco industry.
Tobacco excises have jumped from 46c to almost $1.50 per cigarette over the last 10 years.
Taxes also now account for about $28 of the average $40 price for a packet of cigarettes in Australia, costing consumers a serious chunk of cash.
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That's because imported tobacco goods are subject to customs duty when they're brought into Australia.
Those duties are paid at the time the products arrive at the Australian border and the cost is passed on to the consumer.
At the moment, there's no legal tobacco manufacture occurring in Australia – but if there were, it would also be subject to tobacco excise rates too.
But that's not the only factor in today's price hike.
Since September 2023, tobacco excise and excise-equivalent customs duty have been increasing by an extra 5 per cent per year for three years.
Tobacco products subject to the per kilogram excise and excise-equivalent customs duty (e.g. roll-your-own tobacco) are also being brought into alignment with the manufactured per-stick rate.
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This is done by progressively lowering the "equivalisation weight" from 0.7 grams to 0.6 grams through annual progressive decreases for three years.
The new, decreased weight comes into effect on September 1 each year, with the new weight coming fully into effect from September 1, 2026.
All of this to say that tobacco, cigars, cigarettes and snuff got more expensive today and will likely continue to do so for years to come.
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