Now lawCrime & Courts Introduced in the House of Representatives, 26 Mar 2026

Illegal tobacco sellers now face bigger fines and jail

This law targets the crime gangs behind black market cigarettes. It brings tougher punishments and phone tapping powers. It also gives new ways to take the gangs' money.

Official name: Combatting Illicit Tobacco Bill 2026

Who it affects

• Tobacco smugglers and crime gangs: They face much longer jail terms and far bigger fines. Police can tap their phones.
• Shops that sell under the counter tobacco: Selling or handing out illegal tobacco brings tougher punishments, with a new level for 10kg or more.
• Illegal tobacco growers: Growing or making tobacco without a licence can now mean up to 7 years in jail.
• People thought to have crime money: Officers can search them in person and question them sooner. Court papers can reach them by post or email.
• Smokers: The government says the law aims to cut a black market that sells unchecked and maybe harmful products.

Black market tobacco worth billions

Tobacco in Australia carries a heavy tax. Illegal tobacco is tobacco sold without that tax paid. It is often smuggled in or grown in secret.

The government has an official in charge of fighting illegal tobacco and vapes. That official said the black market was worth between $4.1 billion and $6.9 billion in 2024-25. The Parliamentary Library works for all MPs and takes no side. It says illegal tobacco is at least half of all tobacco sold.

Crime gangs run much of this trade. Police link it to fire bombings and violent attacks between gangs.

Border officers took 2.6 billion cigarettes in one year. That was three times the number four years before. The government says the market keeps growing anyway.

It says the punishments are too low to scare off criminals. This law tries to make the trade riskier and earn criminals less.

How fines are counted

Many fines in federal law are set in units. The Parliamentary Library says one unit is now worth $330.

So a fine of 5,000 units is $1.65 million. Some fines can be higher. That is because they are worked out as a few times the tax that was dodged.

Smuggling penalties go up

The Customs Act covers goods coming into Australia. It already makes some things a crime. One is bringing in tobacco to avoid paying tax. Another is moving or holding tobacco you know was smuggled.

For doing this on purpose, the top jail term rises from 10 years to 15 years. The top fine goes from $330,000 to $3.96 million.

For being reckless, the jail term rises from 5 years to 10 years. The fine goes from $165,000 to $2.64 million. Reckless means you knew there was a real risk and went ahead anyway.

Growing and making penalties rise

Another law covers making and storing goods with a special tax, such as tobacco, fuel and alcohol. You need a licence to make or grow tobacco.

This law makes tougher versions of these crimes when tobacco is involved. Making tobacco without a licence now carries up to 7 years in jail, up from 2 years. The fine rises from $165,000 to $1.65 million. It can be 5 times the tax owed if that is more.

Growing tobacco seed, plants or leaf without a licence gets the same tougher punishment. Punishments for other goods, such as alcohol, stay the same.

Making or using fake labels on bales, or large bundles, of tobacco also brings bigger fines. On-the-spot fines rise from $6,600 to $19,800.

Selling and buying penalties rise

The tax law already makes it a crime to have, sell or buy tobacco when you should suspect the tax was not paid. The punishment depends on how much tobacco there is.

For 500kg or more, the top jail term rises from 5 years to 10 years. For 100kg or more, it rises from 2 years to 5 years. For 5kg or more, there is now up to 2 years in jail. Before, there was only a fine.

The law adds a new level for 10kg or more, with up to 3 years in jail. It also adds supplying tobacco to the list of crimes. Supplying covers selling, giving or handing it out.

Punishments for knowingly growing or making untaxed tobacco also rise. For 500kg or more, the top jail term is now 15 years.

Having 2kg or more of tobacco without the right papers can bring a court fine of up to $660,000.

Say a corner shop keeps 20kg of untaxed cigarettes behind the counter. The owner could face years in jail and a fine in the millions.

Phone taps for tobacco crimes

Police and spy agencies can only tap phones or read stored messages to look into a serious crime.

This law adds some illegal tobacco crimes to the list of serious crimes. Agencies can now ask for court permission to tap calls and messages while looking into them.

The longer jail terms also open up other powers. These include hidden listening and tracking devices, and permission to get into computers.

Crime money cases kept secret

The Proceeds of Crime Act lets officers freeze and take money and property gained from crime. A court can order the property frozen while a case goes on.

Right now, courts can only keep a narrow range of details from these cases out of the public eye. Officers must rely on state rules, which differ.

The law gives courts more reasons to stop details being published and to hold hearings the public cannot attend. The aim is to stop criminals learning about a police case too early.

Searches for crime money

Under the current crime money search orders, officers can search places. But they have very little power to search people.

This law makes a new order to search a person. It lets officers search someone for things like phones, cash, watches and jewellery.

Say a suspect keeps the passwords to their crypto on a phone in their pocket. Officers can now search them for it. The law also updates the rules for searching phones and computers and getting into online accounts.

Questions asked earlier

A court can order a person to answer questions about their money and property after a formal promise to tell the truth.

Until now, these orders were mostly used once property was frozen. The law lets officers ask for them in more cases, even before property is frozen.

Sharing information with agencies

Facts gathered under crime money powers can now be shared with other federal agencies for some of their work. This includes protecting tax money, making people follow rules and deciding licences.

Examples include the agency that tracks dirty money and the company and finance watchdog. This sharing does not cover police cases.

Smaller crime money fixes

Some states and territories signed a national deal on wealth people cannot explain. They can now join talks on sharing money taken from criminals. The scheme gets a new name to match what it covers.

Wealth people cannot explain means property a person cannot show came from a legal source. Courts used to have to make an early order before hearing the main case. This law removes that extra step.

Court papers in these cases can now be sent by post or email, even overseas. This stops people dodging a case by avoiding being handed the papers.

Start date

The bill was brought into the House of Representatives on 26 March 2026. That is the house of Parliament where the government sits. The House passed it on 19 August 2026. The Senate, the other house of Parliament, passed it on 20 August 2026.

The Governor-General signed it into law on 26 August 2026. The Governor-General is the King's representative in Australia.

Most parts started the next day. The rules on sending papers by post and email start 28 days after the law was signed. The money sharing changes start within 12 months.

The tougher punishments apply to crimes done after the new rules started.

How they voted

Its journey through Parliament

Official sources

• Bill page on aph.gov.au
• Text of the bill
• Explanatory memorandum
• Bills Digest

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