Tax Hike Don’t Cause Cigarette Smuggling

August 2, 2012 New Zealand Taxation

Still...Encore...Tax rises have not led to increased smuggling of tobacco, according to Customs’ statistics.

Earlier this week documents from the New Zealand Customs Service were made available, showing that increasing tobacco taxes have not led to a rise in the black market trade of cigarettes.

According to the Customs Service, no significant seizures of cigarettes have been made in New Zealand in the three years ending 2010, indicating that the rising tobacco taxes have not lead to illegal imports of cigarettes.

The Service claimed that the illicit trade of tobacco products in New Zealand largely revolves around individuals bringing small amounts of cigarettes into New Zealand when they arrive back into the country after traveling. Generally, the amounts brought in do not exceed two cartons. There is some evidence that a small number of airline crew and commercial ship crew bringing in cigarettes to sell to retailers in New Zealand. However, all these forms of illicit activity were considered to be insignificant.

The local production and sale of tobacco plants was also not considered to be a major problem, and was is seen as a minor issue.

In the 11 months ending May 31st, the Customs Service intercepted over 790 000 coming into New Zealand, along with nearly 444 470 grams of loose tobacco.

Photo by racineur