Direct answer: cigarettes cost so much in Australia because of federal tobacco excise — a per-stick tax that, after the early-2026 indexation, added about A$1.52 to every cigarette, or more than A$30 to a standard 20-pack, before GST and retail margins are added. The excise is raised twice a year in line with earnings growth, and it typically makes up roughly three-quarters of the price of a legal packet. Australian media and industry sources consistently describe Australia as the most expensive country in the world for legal cigarettes. (Figures below were checked against published Australian sources on 8 August 2026.)
The short answer: tobacco excise
Tobacco excise is a federal duty levied on each cigarette stick, not a percentage added at the shop counter. Manufacturers and importers pay the duty, and the cost is built into the wholesale and retail price. Because the rate is set per stick, a 20-pack carries 20 times the per-stick duty, and a 200-stick carton carries 200 times it.
Australia’s excise is among the highest in the world. In March 2026, news.com.au reported that the six-monthly increase had taken the tax on a single cigarette to about A$1.52, “more than $30 in tax on a standard pack of 20 before GST or retail margins are added,” and described Australia as home to the world’s most expensive legal cigarettes. The industry publication Tobacco Insider (July 2026) reached the same conclusion, noting a standard 20-pack commonly costs more than A$50.
How Australian tobacco excise works
Three features explain why the excise keeps climbing:
- Per-stick duty. The rate is charged on every cigarette, so the tax component grows in step with the number of sticks in a pack or carton.
- Twice-yearly indexation. The rate is indexed twice a year in line with growth in average weekly ordinary time earnings, which is why prices tend to rise at set points during the year (ABC News, 30 May 2024; news.com.au, 4 March 2026).
- Legislated extra increases. On top of routine indexation, Australian governments have added scheduled rises over the years: a 25 per cent increase in 2010, annual increases of 12.5 per cent between 2013 and 2020, and an extra 5 per cent a year from September 2023 through 2025 (ABC News, 30 May 2024; news.com.au, 4 March 2026).
What the excise adds to a pack
The published figures give a clear picture of the tax share:
- After the early-2026 indexation, excise was about A$1.52 per cigarette — more than A$30 of tax on a 20-pack before GST and retail margins (news.com.au, 4 March 2026).
- In May 2024, with excise at nearly A$1.30 per cigarette, the excise alone on a 25-pack was about A$32 before GST (ABC News, 30 May 2024).
- Excise makes up roughly three-quarters of the A$40–A$50 cost of a legal packet (news.com.au, 4 March 2026); Tobacco Insider (July 2026) puts the tax share above 80 per cent of the retail price for some products.
- At reported 2026 prices, a pack-a-day habit was estimated to cost about A$14,600 a year (news.com.au, 4 March 2026).
These figures are dated observations from the sources cited, not permanent prices. The exact amount of tax inside a pack you buy depends on the current rate and the pack size.
GST and retail margins
Goods and services tax of 10 per cent is applied at the point of sale on top of the excise-inclusive price (ABC News, 30 May 2024; Tobacco Insider, July 2026). Retail margins, freight and other supply costs make up the remainder of the shop price. That is why two retailers can sell the same brand at different prices even though the excise component is identical.
Plain packaging and other rules add context, not the main cost
Australia’s tobacco-control rules — including plain packaging, which has been required since 2012, and large graphic health warnings — change how packs look and what they must carry. They are separate regulatory requirements and are not the main reason prices are high. The dominant price driver is the excise. If you want the detail on why every Australian pack looks the same, see our guide: Why Are Cigarette Packs Plain in Australia?
The same price pressure is cited by authorities and retailers as a driver of illicit tobacco in Australia (ABC News, 30 May 2024). This article explains pricing only; it does not provide advice about illegal products.
How this shows up in the prices you see online
Because the duty is charged per stick, online adult catalogues quote carton prices for the standard one-carton/10-pack sale unit, and the excise component scales with the pack count. Live AUD prices are observations, not permanent facts. For example, the Marlboro Red carton (SKU SS-302) displayed a current price of A$184.00 (regular price A$230.00) on 8 August 2026.
For the live catalogue and current carton prices, see the Texvilo brand catalogue. To compare carton prices across brands, use How to Compare Cigarette Carton Prices in AUD.
Common questions
Why are cigarettes more expensive in Australia than almost anywhere else?
Because Australia combines a high per-stick excise with twice-yearly indexation, legislated extra increases and 10 per cent GST. News reports and industry analysis consistently rank Australia as the most expensive country in the world for legal cigarettes (news.com.au, 4 March 2026; Tobacco Insider, July 2026).
How much tax is on a packet of cigarettes in Australia?
After the early-2026 indexation, about A$1.52 per cigarette — more than A$30 of tax on a 20-pack before GST and retail margins are added (news.com.au, 4 March 2026). The exact amount changes at each indexation and depends on pack size.
Do cigarette prices go up every year?
Generally yes. Routine indexation happens twice a year in line with earnings growth, and additional legislated increases have been applied in most years over the past decade and a half.
Why did the price on a product page change between visits?
Retailers update current prices when excise indexation or sales change the displayed amount. A product page can show a current price that is lower than the regular price; see Current Price vs Regular Price: How to Read a Product Page for how to read both fields.
Note: tobacco contains nicotine and smoking causes serious health risks. This article is written for Australian adults aged 18 and over and explains pricing; it is not a recommendation to smoke.