Tobacco and vaping products in AustraliaTobacco and vaping products in Australia: An economic asses

The dynamics of cigarette and RYO tobacco tax revenues Purpose of excise taxes The rapid growth in tobacco excise tax rates in Australia The evolution of tobacco tax revenues The price elasticity of demand and its importance to tax revenues 3. [...] The principal reason for the slowdown in the growth of tax revenue has been a decline in the volume of consumption of legal tobacco in recent years. [...] The greater the reduction in real income, the greater will be the reduction in the consumption of tobacco and the greater will be the overall price elasticity of demand. [...] It is patently difficult for the customs and excise authorities to control the difficult to control … supply of illicit tobacco in Australia, given the length of the coastline, the size of the country, and the volume of Australia’s international trade. [...] A Giffen good is so strongly inferior in the minds of consumers that the income effect more than offsets the substitution effect, so that the net effect of an increase in the price of the good is to increase demand for it.