CANBERRA, May 2 (Xinhua) -- A significant percentage of Australian smokers are using illegal cigarettes, said a report published on Wednesday.
The KPMG study revealed that tobacco consumption fell 6.1 percent between 2016 and 2017 but the share of tobacco coming from illegal sources rose to 15 percent to 1,248 tonnes.
In 2009 illicit tobacco accounted for just 9 percent of overall consumption.
The use of illegal cigarettes is costing the federal government up to 2 billion Australian dollars (1.49 billion U.S. dollars) in lost tax revenue.
According to the report the number of illegal cigarettes smuggled into Australia from other countries has grown by a third.
A record 264 tonnes of illegal tobacco was taken in 120 seizures at Australian ports during the studied timeframe.
"Both the number of seizures and the total volume of tobacco smuggled (via international mail) increased in 2017," the report said.
Contraband cigarettes are around 40 percent cheaper than legal cigarettes while loose-leaf tobacco is 70-80 percent cheaper.
Australia's excise on cigarettes is expected to raise 15.6 billion Australian dollars by 2021, up from 11.2 billion Australian dollars in 2017-18 as further increases come into effect.
The excise on tobacco was raised 25 percent in 2010 with eight further 12.5 percent increases legislated to take place between 2013 and 2020. It is currently equivalent to 75 percent of a pack of cigarettes.
"Illicit tobacco reduces the price incentive to quit, especially for young people," Colin Mendelsohn, a tobacco control expert from the University of New South Wales, told News Corp Australia on Wednesday.