Tobacco Taxes Killing NZ Shop Owners

July 24, 2018 Taxation in New Zealand

tobacco taxes in New ZealandWELLINGTON – Cigarettes and tobacco kill smokers, but cigarette taxes have led to the deaths of shopowners.

In a press conference on July 23rd, the acting Prime Minister of New Zealand Winston Peters claimed that the rate of taxation applied to the sale of tobacco and cigarettes is leading to the murder and assault of shop owners in New Zealand.

The government of New Zealand has a long-standing policy of annual increase to the rate of tax applied to cigarettes.

The hikes are intended to drive down the rate of smoking in the country, with the ultimate goal of seeing a “smoke-free” New Zealand by the year 2025.

Over the course of 2018, the number of violent robberies and assaults on small businesses appeared to have escalated, and many commentators suggested that the cause of the escalation was the increasing cost of smoking.

It is believed that a significant portion of cigarettes stolen during the robberies would end up being sold on the illicit market.

A recent study completed by KPMG has suggested that in 2017 approximately 9 percent of all tobacco was obtained illegally, resulting in a loss of NZD 182 million in tax revenues.