Popping Down to the Shops and Into Australia's Booming Tobacco Black Market

As of September 1, 2016 the tobacco tax is set to increase again. Next month's surge is expected to raise ciggie prices by between $1.30 to $3.35 per pack, depending on size. Then between 2017 and 2020 there will likely be a steady tax rise of 12.5 percent each year.

Some have argued the rise in cigarette prices will lead to more people quitting. Others contend the price hike will add strength to an already booming tobacco black market and lead to an increase in tobacco related criminal activities. Around 14 percent of the total tobacco consumed in Australia is black market, in total about 2.4 million kilograms per year smuggled in from overseas. That means the government is left with a $1.4 billion-sized hole—lost revenue from untaxed product.