Petrol Taxes in NZ Will Hit the Poor and Old Cars

April 5, 2018 Taxation in New ZealandUncategorized

petrol tax in New ZealandWELLINGTON – New Zealanders who drive old and inefficient cars will see their tax bills rise.

On April 3rd a researcher from the economic group the New Zealand Initiative, Sam Warburton, claimed that the upcoming hike to petrol taxes in Auckland will adversely impact low-income households.

The New Zealand government has recently announced that it will be raising the rate of tax levied on the sale of petrol in the country by as much as NZD 0.12 per litre, and, further, the government will introduce a regional fuel tax targeted at the country’s largest city, Auckland.

In combination, the two taxes could see petrol in Auckland set consumers back by an extra NZD 0.20 per litre.

Sam Warburton explained that the financial impact of petrol excise taxes are directly tied to the amount of petrol used by a taxpayer, and, therefore, to the amount of petrol used by their car.

Due to the direct link between the impact and the petrol use, consumers with older and less efficient vehicles will feel a heavier toll from the tax.

He also suggested that low-income taxpayers and larger families are more likely to have cars with poor fuel efficiency.

Further, consumers who are in a financial position which allows them to buy efficient vehicles and electric vehicles will be able to bypass a large portion of the tax, leaving the payment to those in need.