Tobacco customs duty rises to $2,587.90 per kilogram from September

The Commonwealth of Australia Gazette has published a notice substituting the rates of customs duty on tobacco and cigarettes, effective from 1 September 2026. Issued under the Customs Tariff Act 1995, the measure raises the duty on tobacco to $2,587.90 per kilogram and on cigarettes to $1.55274 per stick, increasing the cost of tobacco products for importers and consumers.

The notice was signed by Melissa Catania, delegate of the Comptroller-General of Customs, and dated 28 August 2026. It was registered in the gazette on 7 September 2026 as Notice (No. 4) 2026 (official reference C2026G00591).

Indexation mechanism

The new rates are the product of the annual Average Weekly Ordinary Time Earnings (AWOTE) indexation, which adjusts excise-equivalent customs duty in line with movements in average weekly earnings. The notice is given under subsections 19AB(11) and 19ACA(9) of the Customs Tariff Act 1995, which provide for the substitution of duty rates for excise-equivalent goods.

The indexation applies to goods classified to Schedule 3 of the Act, as well as to items in Schedules 4A, 5, 6, 6A, 7, 8, 8A, 8B, 9, 9A, 10, 10A, 11, 12, 13, 14, 15 and 16 that relate to those subheadings. These schedules cover goods originating under Australia’s various free trade and preferential arrangements.

Affected tariff subheadings

The new duty rates apply to a range of tobacco tariff subheadings, distinguishing between tobacco content and cigarettes:

• $2,587.90 per kilogram for unmanufactured and manufactured tobacco, including subheadings 2401.10.00, 2401.20.00, 2401.30.00, 2402.10.80, 2403.11.00, 2403.19.90, 2403.91.00, 2403.99.80 and 2404.11.00
• $2,587.90 per kilogram of tobacco content for subheadings 2401.20.00, 2402.20.80 and 2403.91.00
• $1.55274 per stick for cigarettes, including subheadings 2402.10.20, 2402.20.20, 2402.20.80, 2403.19.10 and 2403.19.90

The notice confirms the operative date of the new rates as 1 September 2026, meaning the higher duty applies to goods entered for customs from that date.

Impact on consumers and importers

The indexation is part of the routine annual adjustment of tobacco excise and customs duty, which is designed to keep the tax burden on tobacco products rising in line with earnings growth. For importers, the higher per-kilogram and per-stick rates translate directly into increased landed costs, which are typically passed on to retailers and, ultimately, to consumers.

The measure also sits alongside broader government action on tobacco, including the Combatting Illicit Tobacco Act 2026 (Act No. 82 of 2026), which was assented to on 26 August 2026 and amends customs, excise and taxation law relating to the proceeds of crime and illicit tobacco. Together, the higher duty and the new enforcement framework reflect a continued policy focus on both the cost and the regulation of tobacco products in Australia.

Source: Commonwealth of Australia Gazette, Government Notices, 7 September 2026, p. 1 (official reference: C2026G00591).