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Time to quit smoking? Cigarette packs jump to almost $30 a pack as a 12.5 per cent tax increase kicks in

Cigarette prices in Australia have jumped to nearly $30 a packet
Federal government excise increased cost 12.5 per cent from 1 September
Dunhill cigarette packs will reduce from 25 to 23 cigarettes this year
There will be a federal tobacco excise increase each year until 2020
Australian prices are now among the highest in the world

Smoking cigarettes just became a whole lot dearer with the price of a packet rising to almost $30 on Thursday.

The 12.5 per cent federal government tax hike confirms Australia as among the most expensive places in the world to buy a pack of cigarettes.

And it’s expected the tobacco excise, which will increase 12.5 per cent annually until 2020, will eventually push a packet of smokes over the $40 mark.

One of the tobacco giants has told Tasmania’s 7HoFM believes the decision will push customers onto the black market.

‘We know from a report by KPMG that 2.4 million kilograms of illegal tobacco were sold in Australia last year – that means one in every seven cigarettes sold was illegal,’ British American Tobacco spokesman Nick Booth he told the radio station.

BAT made a decision to reduce the amount of cigarettes per pack rather than increasing the cost.

Its Dunhill brand will be reduced to 23 per pack from next month but the wholesale price will remain the same as the pre-tax Dunhill 25 pack.

BAT claims its smokers ‘told us that instead of paying a higher price they’d prefer to have slightly fewer sticks and have the price stay the same’.

The Dunhill brand is expected to transition the smaller size by the end of the year.

A 12.5 per cent federal tobacco excise increase plus indexation will start from September 1 which will see smoker’s coughing up at least $1.30 to $3.35 more tax per pack, depending on its size.

At the moment smoker’s pay a total of 53.7 cents per cigarette ranging from $10.57 for a pack of 20 to $26.85 for a pack of 50.

The exorbitant prices are hoped to discourage smokers and bring down smoking rates across Australia, reported The Herald Sun.

But cigarette makers have warned the steep excise may fuel people to engage more with the illegal tobacco black market.

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