Tobacco tax passes first hurdle

05:52, May 25 2012

Legislation raising the excise tax on tobacco has passed its first reading in Parliament.

The Customs Excise (Tobacco products - Budget Measures) Amendment Bill passed on a voice vote and has been referred to a select committee to hear evidence before it is reported back to Parliament by late September.

Due to take effect from January 1, the bill pushes up the excise tax on tobacco by 10 per cent a year each year for the next four years. That's on top of an automatic price adjustment to match inflation.

The steep increase will raise the price of a packet of 20s to $20.50 a pack by 2016.