The ever growing black market

1 News reported:

The latest estimates put the market share for illegal tobacco sales between 25% and 65%, illicit tobacco and e-cigarette commissioner Amber Shuhyta told a Senate estimates hearing on Tuesday night.

Rising tobacco taxes have driven the average price of a pack of over-the-counter cigarettes towards $50 and incentivised criminal gangs to set up shop.

In stark contrast, a pack of black market cigarettes bypassing legal import channels can be easily found for about AU$15 (NZ$17.17).

The result is a steep decline in taxation revenue and sales for legitimate retailers.

The same has been happening in NZ. If you tax something too much, then illegal sales replace legal sales.