Explanatory Memorandum
(Circulated by authority of the Minister for Law Enforcement and Cybersecurity, the Hon Angus Taylor MP)Outline
The 2016-17 Budget measure, 'Tobacco Excise - measures to improve health outcomes and combat illicit tobacco' proposed legislative amendments to strengthen illicit tobacco offences by:
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- removing the need to prove that illicit tobacco is imported or domestically produced (the proof of origin requirement);
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- ensuring consistency of penalties between domestic and border-related illicit tobacco offences; and
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- including new offences for tobacco smuggling at the border based on recklessness.
The Customs Amendment (Illicit Tobacco Offences) Bill 2018 (the Bill) would amend the Customs Act 1901 (the Customs Act) to:
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- create two new offences in respect of imported illicit tobacco based on recklessness; and
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- allow officers of Customs to investigate certain new illicit tobacco offences that are proposed to be contained in the Taxation Administration Act 1953 (the TAA).
The new illicit tobacco offences to be included in the TAA would not require the origin of the tobacco to be proven where it is reasonably suspected that the excise or excise equivalent customs duty has not been paid (the reasonable suspicion offences). That is, it would not be necessary to prove whether the tobacco was illegally imported or illegally produced or manufactured domestically.
Offences are also proposed for inclusion in the TAA to replace the current illicit tobacco offences in the Excise Act 1901 (the Excise Act) specifically, the offences in sections 117C - 117H (various offences in relation to tobacco seed, tobacco plant and tobacco leaf). These amendments are set out in the Treasury Laws Amendment (Illicit Tobacco Offences) Bill 2018.
Section 233BABAD of the Customs Act contains criminal offences for importing goods which are tobacco products with the intention of defrauding the revenue, and conveying and possessing tobacco products that the person knows were imported with intent to defraud the revenue. However, as it is often difficult to prove intention or knowledge beyond reasonable doubt for an offence against section 233BABAD, new offences are proposed to be inserted into this section based on recklessness, rather than intent.
To enable officers of Customs to investigate and enforce the proposed new illicit tobacco offences (that do not require proof of origin in the TAA), it is proposed to amend the Customs Act to extend relevant powers of officers in Division 1 of Part XII of the Customs Act to offences in the TAA.
Financial Impact Statement
The financial impact is an unquantifiable increase to revenue over the forward estimates period.