International travellers -- mainly higher income earners -- can buy "duty-free" cigarettes and spirits for around half of the normal retail price because they are exempted from excises and GST. Although the Federal Government does not publish an official estimate of the costs to the budget of the current duty-free arrangements, the system of duty free and other tax concessions for Australian and international tourists is estimated to result in $300 million in lost revenue each year. This paper proposes that duty-free concessions be abolished for Australian passport holders and that the Australian government consider implementing agreements with countries around the world to reduce the extent of duty-free shopping.