People who smoke 'rollies' because they think it's cheaper are about to be taxed the same amount as packet cigarettes

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Roll your own (RYO) cigarettes has been targeted in Scott Morrison’s 2017 budget to equalise taxation on tobacco.

The government will adjust the taxation of “rollies” and other products such as cigars, so that manufactured cigarettes and RYO tobacco cigarettes are comparable.

It is expected to deliver an additional $360 million in revenue over four years to 2020, starting on September 1. This includes an additional GST component of $35 million, which will be paid to the States and Territories.

It will be achieved by calculating the per kilogram excise and excise-equivalent customs duty rates on the assumption that the average tobacco content of a cigarette is 0.7 grams, rather than the current assumption of 0.8 grams.

According to the budget, “since the average cigarette contains less than 0.8 grams of tobacco, the current tax treatment of RYO tobacco is relatively more favourable. The adjustment to the rates of duty will better align the tax on tobacco regardless of its form.”

It coincides with the timing of the previously legislated 12.5% tobacco tax increases, which occur on September 1 annually.

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