Tobacco Tax on the Up Again

October 17, 2012 New Zealand Taxation

tax on cigarettesNew tax hikes will mean that smokers will see the price rise of cigarettes to above NZD 20 per pack within 4 years time.

On October 16th parliament passed the Customs and Excise (Tobacco Products-Budget Measures) Amendment Bill, approving an annual 10 percent increases to excise duties on tobacco products for the years from 2013 to 2016.

Explaining the need to raise the excise duties, the Associated Health Minister Tariana Turia said that “…smoking continues to be by far New Zealand’s single leading cause of avoidable death and disease,” and “…these tobacco excise increases will save lives. They send a strong signal that smoking just isn’t worth it.”

The tax increases are scheduled to take effect on January 1st in each year between 2013 and 2016, and will bring the average price of a pack of cigarettes to NZD 20 by the end of 2016.

The Bill also removes the prices of cigarettes from the Consumer Price Index calculations for increases of welfare payments.

The tax increases received support from all parties in parliament, but the move to strike the cost of cigarettes from welfare calculations was opposed by the Green party, Mana and New Zealand First.

The price increase will be accompanied by greater support to the government’s cessation programs, such as Quitline and the availability of nicotine gum.

Photo by danieljordahl