Treasury Does Not Support Tobacco Tax

June 3, 2010 New Zealand Taxation

Smoking A Roll-UpNewly revealed documents show that the New Zealand Treasury did not fully support the Government’s latest round of excise duty increases on tobacco products.

On June 2nd a New Zealand Treasury paper was publicized revealing that the New Zealand Government was advised not to carry out the April 28th tobacco excise-duty rate hikes. Under the change, excise duties on rolled-cigarettes increased by 10 percent and 24 percent on loose tobacco. The rates will rise by an additional 10 percent on January 1st 2011 and January 1st 2012. But, the New Zealand Treasury advised Tariana Turia, Associate Health Minister, was advised by the Treasury to “prepare a tobacco control strategy using a range of policy tools,” instead.

According to the Treasury paper “…excise is claimed to be the most effective anti-smoking policy, yet it is not highly effective.” Dr Murray Laugesen, New Zealand based smoking and cigarette policy expert, agreed with the comments, claiming that New Zealand’s previous tax increases did not produce a long-term decrease to national smoking rates. According to Dr Murray Laugesen , the number of smokers would decrease if large tax increase were combined with holistic policy measures. He explained, saying “…they should be combined with big mass-media campaigns, with smokers reminded of the next price rise and having that combined with a quit date to get the synergies working.”

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