Australia - Smuggling of illegal cigarettes has hit an all-time high..

September 7, 2009 - Smuggling of illegal cigarettes has hit an all-time high as the Federal Government considers introducing heavier taxes on tobacco products. International flight crews bringing illegal cigarettes through Sydney Airport account for part of a major spike in Australia's tobacco black market.

Desperate attempts to avoid high tax rates are leading to unregulated tobacco products – often containing contaminates such as rat droppings and metal shavings – being sold under-the-counter at general stores.

For years, the major cigarette companies have regularly tried to block efforts to raise cigarette taxes or import fees by claiming that they will spark massive increases in cigarette smuggling and black markets.

Figures obtained by The Daily Telegraph revealed customs detected 11 shipments of illicit tobacco products comprising 65 tonnes of leaf and 22 million cigarettes during the first three months of this year – an attempted tax evasion of more than $27 million. That was already more than half the $50 million worth of possible tax evasion from seizures in all of 2008.

Customs national investigations manager Richard Janeczko said smugglers were going to extreme lengths. "Anything from airline crews bringing them in, people trying to order them in on the internet, or full container loads disguised as things like pretzels," he said. "But the big smuggling is done by full container load – you're talking $4-$6 million dollars in revenue foregone in every one that's gone through."

In July, Customs arrested four men over an attempt to smuggle more than 4.8 tonnes of tobacco into Australia from Lebanon concealed within plastic tubs.

"Most of the illegal stuff is made in unregulated factories," Mr Janeczko said. "So you can't be sure exactly what's in them."

Earlier this month a report by the National Preventative Health Taskforce called for higher taxes on tobacco products. Rudd government is widely expected to announce a sharp increase in taxes on cigarettes following the Preventative Health Task Force's final submission to Health Minister Nicola Roxon this week. There has been no increase in the tax for a decade.

The price of a pack of 30 cigarettes would jump to $20 within three years if the Government adopts the plan.

Reference: Illegal cigarettes being smuggled into Australia,, 9/7/2009.

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