Illegal tobacco is burning a $4 billion hole in Australia's hip pocket but policy boffins are sceptical lowering the tax on legal cigarettes will stop the rot.

The economic cost of organised crime to Australia jumped to $82.3 billion in 2023/24, up from $68.7 billion in the previous 12 months, reports from the Australian Criminal Intelligence Commission and Australian Institute of Criminology show.

Illicit tobacco's estimated economic cost rose to $4 billion, a four-fold increase in the past three years.

Of that figure, $3.3 billion was the result of lost tax revenue from the tobacco excise.

Organised crime groups' efforts to control the illicit tobacco and vape market have led to more than 200 fire bombings, at least three murders and countless acts of intimidation and extortion,

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