Public Comment Forum

From: Convenience & Impulse Retailing

By Lucy Marrett

A media release from Jos de Bruin, MGA Independent Retailers. 

The illicit tobacco trade in Australia is costing huge dollars in tax revenue and the Federal Government has been determined to bring this costly criminal activity under control. In addition to the crippling economic effects, this insidious illegal tobacco trading is fuelling an increase in organised crime in Australia, particularly in Melbourne and Sydney. Record numbers of illegal cigarettes and quantities of illicit tobacco are constantly being uncovered by federal police and customs officials. The importation of illegal tobacco is getting out of control and our laws need to be tightened to combat these crimes. Jos de Bruin, CEO of Master Grocers Australia has welcomed the proactive initiative of the Federal Government in taking a firm stand to help stamp out this serious and destructive, illegal tobacco market by introducing new laws.

From: Tax Foundation

Scott Drenkard

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Increasing Cigarette Taxes Will Exacerbate Black Markets

Another unintended consequence of high taxes on cigarettes is that large disparities in taxes among states encourage illicit movement of cigarettes across state lines to evade taxes.

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One experience I had really made the magnitude of this issue sink in for me. A few years ago, I was asked to testify before the U.S. Senate Finance committee on this cross-border issue, and I wanted to see how easy it was to procure an improperly stamped pack of cigarettes. Even I was surprised that at the very first D.C. bodega I visited, the pack of cigarettes I bought had a Virginia tax stamp on it. This is illegal—but the practice will likely grow in prevalence if District cigarette tax rates increase.