Slash taxes to battle black market, says AACS

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The AACS has voiced its support for a new bill that would cut company tax and abolish tobacco, alcohol and fuel excise.

Liberal Democrat Senator David Leyonhjelm proposed the bill. Introducing it, he said: “Smokers pay for the negative consequences of their habit many times over through exorbitant taxes.”

‘Discrimination’

Senator Leyonhjelm’s bill has since received enthusiastic support from the Australasian Association of Convenience Stores (AACS).

AACS CEO Jeff Rogut says taxes on legal tobacco are bad for consumers and small businesses alike.

First, he says, they apply unfair financial pressure on people from lower socioeconomic backgrounds. The taxes raise the cost of living and “effectively amount to discrimination”.

Second, they have a negative impact on small businesses such as convenience stores. They miss out on lost legitimate tobacco sales, says Mr Rogut, because consumers increasingly turn to the black market.

He points out that legal tobacco is a significant contributor to convenience profitability, representing about 38 per cent of a typical store’s sales.

It’s also a valuable source of tax revenue, Mr Rogut says. In fact, he claims, the Australian government missed out on more than $1.9 billion in 2017 because of illicit tobacco.

‘Singled out and demonised’

In a statement, Mr Rogut said: “Law-abiding adults who choose to consumer legal tobacco have for too long been singled out and demonised by governments through exorbitant excises.

“It has created an environment whereby Australia is one of the world’s most expensive markets for legal tobacco. This, of course, has given rise to the massive illicit tobacco problem we all now face in the community.

Mr Rogut admitted that the new bill may be “politically charged”, but added: “It also represents a fairer deal for consumers and small businesses, and an important counter to the criminal gangs profiting from the illicit tobacco trade.

“Every time we make it more expensive for people to buy legal tobacco, we make it easier and more profitable for criminals involved in the illicit tobacco market trade.”