Coalition eyes 50 per cent tobacco tax cut to crack down on black market

The Coalition is considering a major cut to tobacco excise, with senior Liberals open to reducing the tax by up to 50 per cent.

The move is aimed at tackling the booming black market, which is expected to cost the federal budget around $65 billion by 2030.

Opposition MPs say a 30 to 50 per cent cut may be needed to push smokers away from illegal products.

The government has so far resisted major tax changes, instead focusing on enforcement.