The cost of a packet of cigarettes could rise to $40 after the Federal Government confirmed a hike in the tobacco excise as part of the 2016 Budget released tonight.
Tobacco is set to increase in cost under the 2016 Budget.
Tobacco excise and excise equivalent customs duties will go up 12.5 per cent on the 1st of September each year for four years until 2020.
The increases are in addition to existing indexation to average weekly ordinary time earnings.
In addition, the Government will also cut the duty free tobacco allowance in half, from the current 50 cigarettes to 25, starting from July the 1st 2017.
This measure is estimated to yield $4.7 billion over the forward estimates period.
In addition, the Government will target tobacco smuggling by providing $7.7 million over two years to expand the Department of Immigration and Border Protection's Tobacco Strike Team.
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