New Zealand Hikes Cigarette Taxes

January 4, 2016 Taxation in New Zealand

WELLINGTON – Days after the government of New Zealand hiked the taxes on cigarettes claims have come forward that the rise is nothing but a revenue gathering mechanism.

On January 1st the excise taxes on the sale of cigarettes and tobacco in New Zealand were raised by 10 percent.

The latest tax hike is the fourth annual rise implemented by the government as part of a new regulation enacted in 2014.

Following the hike, the average price of a 20 pack of cigarettes is now well over NZD 20, and it is estimated that the habit costs the average smoker in excess of NZD 7 000 per year.

In previous years the annual tax hikes have led to a surge in use of free public smoking cessation services, with the national Quitline program reporting a 1 685 jump in the number of sign ups within the first week of January 2015.

While the hike has received support of anti-smoking and health groups, the independent tax advocacy group the Taxpayers Union is claiming that the measure is purely a tax raising measure.

The Taxpayers Union stated that the annual cost of health care for smokers and smoking related illnesses is only a third of the annual tax revenues collected from excises taxes on tobacco products, and the latest tax hike is not necessary to cover the cost of treatment of smokes.

Photo By: machechyp