Increasing taxes on cigarettes and tobacco
On 1st August 2013, the Australian Government announced that it will introduce staged 12.5 per cent increases in tobacco tax over the next four years.
Increase in taxation is just one of a number of strategies aimed at encouraging people to quit smoking. It also aims to help stop people from commencing smoking in the first place, especially younger people. It is seen as an important step in reducing the prevalence of smoking in Australia.
Can an increase in tax really reduce smoking prevalence?
Research conducted in a number of countries, including Australia, shows that when a tobacco tax increase occurs, the number of people quitting smoking and seeking help to quit smoking increases. In addition, there is evidence that people from lower socio-economic groups may be more likely to quit smoking as a result of tax increases.
Do people want an increase to tobacco tax?
While the tax increase on tobacco may not be popular with everyone, results from Australian public opinion polls and surveys show that a majority of people support increases to tobacco tax, especially if the revenue is diverted into smoking cessation and health initiatives.
When will tobacco taxes increase?
The tobacco tax increases will commence on 1 December 2013, with further increases on 1 September 2014, 1 September 2015, and 1 September 2016. These are in addition to the increases that will occur under indexation arrangements.