Tobacco excise collections have collapsed to their lowest level in 14 years as smokers turn to the black market for cheaper cigarettes, blowing a $17.6 billion hole in the tax base and piling pressure on the government to increase enforcement.

The federal government expects to collect just $7.1 billion in tobacco excise next financial year, according to Treasury, a 57 per cent fall from the record $16.3 billion haul in 2019-20 and the lowest yearly take since 2011-12.