Tobaccoo Taxes Need to Be at Least Doubled

September 3, 2014 Taxation in New Zealand

WELLINGTON – The government of New Zealand will need to more than double the level of its planned hikes to tobacco taxes, if it wishes to reach the country’s target of lowering taxes.

On September 3rd the results of new research on tobacco taxation in New Zealand were released in the international medical journal Tobacco Control, showing that tobacco taxes would need to rise by more than 20 percent each year in order for the country to achieve its goals for smoking reduction.

Currently tobacco taxes are set to increase by 10 percent per year until the end of 2016, and if the same rate of increase were maintained until 2025, the national smoking rate could fall to as low as 8.7 percent.

In 2011 the New Zealand government adopted the goal of reducing smoking rates to less than 5 percent of the population by 2025.

If the scheduled tax hikes were raised to 20 percent per year, the smoking rate in the country may fall to as low as 7.6 percent, approximately 2.6 percent above the government’s target.

According to the author of the research Tony Blakely, hikes to tobacco taxes have been shown to be one of the most effective ways to lower smoking rates, although in order to reach the national smoke free target, the government will also need to turn to greater support for cessation programs and support facilities.

Photo By: Robert S. Donovan