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.
More budget coverage:
- BUDGET 2017: WHAT YOU NEED TO KNOW
- BUDGET 2017: Treasurer Scott Morrison’s budget speech in full
- BUDGET 2017: The ATO has already squeezed $2.9 billion from several multinational companies
- NEW TAX, BONUSES HELD FOR YEARS: Australia’s top bankers are the budget’s biggest losers
- BUDGET 2017: This is why Scott Morrison sees ‘better days ahead’ for Australia
- CHART: The key economic forecasts in Scott Morrison’s federal budget
- The federal government wants to invest $75 billion in infrastructure, including a Melbourne to Brisbane inland rail line
- Here’s how the 2017 budget has changed the rules in the housing game
- Here is Scott Morrison’s plan to get the budget back to surplus using ‘good’ and ‘bad’ debt
- Scott Morrison is getting rid of GST on digital currencies like Bitcoin
- How the 2017 budget will affect millennials who like smashed avocado toast
- The Turnbull government wants to extend crowdsourced equity funding to private companies
- A simple guide to reading the federal budget papers
Business Insider Emails & Alerts
Site highlights each day to your inbox.