The sting, dubbed Operation Greyhound, was executed by the ATO with help from the Murray River Police District's rural crime team and other NSW Police personnel.

During a raid, officers located 24 acres of illicit tobacco crops in Koraleigh, a small western Riverina village on the Murray River south of Tooleybuc.

The crops, which had an estimated excise forgone value of about $42 million, were destroyed.

A picking machine and water pump were seized by investigators.

Acting ATO Assistant Commissioner Megan Croaker said the amount of illicit tobacco found was equivalent to the weight of 13 bulldozers.

"This was a sophisticated, organised operation," Assistant Commissioner Croaker said.

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The discovery and subsequent destruction of the Koraleigh crop showed the ATO's commitment to detecting, disrupting and dismantling crime syndicates that grow illicit tobacco, she said.

"Organised criminals view the illicit tobacco trade as low-risk and high-reward, but this simply isn't the case," she said.

"This result showcases the impact of our operations in stopping criminals in their tracks.

"The ATO is primarily focused on targeting the source of the illicit tobacco supply.

"By stopping illicit tobacco from going from crop to shop, it creates a level playing field for small businesses."

It has been illegal to grow tobacco in Australia for more than a decade and the ATO said penalties for growing, selling or possessing illicit tobacco were significant.

If convicted, criminals may face up to 10 years' imprisonment, up to a $330,000 fine, or both.

According to the ATO, the 2019-20 tax gap estimates that illicit tobacco cost the Australian community $909 million in lost excise revenue each year, instead being channelled into organised criminal activities.

The tax office said it would continue to work with cross-agency partners to ensure illicit tobacco isn't grown, manufactured or produced, "stopping organised criminals from profiting in the process".

If you suspect that illicit tobacco is being grown or manufactured in your community, you can report it anonymously by completing the tip-off form at ato.gov.au/tipoff, or by phoning 1800 060 062.

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