Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Hansard source

First, I'd like to thank all of those members on both sides of the chamber who have contributed to this debate. To ensure that cigarettes and roll-your-own tobacco receive comparable taxation treatment, the government will amend the Excise Tariff Act 1921 and the Customs Tariff Act 1995. The Excise Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017 and the Customs Tariff Amendment (Tobacco Duty Harmonisation) Bill 2017 adjust the rate of excise and excise-equivalent customs duty on roll-your-own tobacco over four years, with increases occurring on 1 September each year, starting in 2017. This matches the timing for other changes to tobacco rates, therefore minimising compliance costs.

The adjustment will address the disparity in the duty applied to cigarettes and roll-your-own tobacco. This disparity occurs because the duty on cigarettes is a set amount per stick, which assumes each cigarette contains 0.8 grams of tobacco, while duty on roll-your-own tobacco is applied to the actual tobacco content at a per-kilogram rate. However, the average cigarette contains less than 0.8 grams of tobacco. As a result, the average manufactured cigarette is subject to a higher rate of duty than a comparable cigarette made from roll-your-own tobacco. Adjusting the per kilogram excise and excise-equivalent duty rate to better reflect the average tobacco content of manufactured cigarettes will improve the fairness and efficiency of the taxation system. It will also ensure tobacco is subject to comparable duty treatment regardless of form. I commend these bills to the House.

Question agreed to.

Bill read a second time.

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