Tobacco Tax Need Bigger Hikes

February 9, 2016 New Zealand Taxation

tax on cigarettesThe government is being urged to continue with its annual hikes to cigarette taxes in New Zealand, and to at least double the rate of these increases.

The National Maori Tobacco Control Service, or Te Ara Ha Ora, has called on the government to continue imposing new tax hikes on the sale of tobacco in New Zealand in order to achieve the goal of a smokefree New Zealand by 2025.

Earlier this year the fourth and final planned hike to the rate of tax on the sale of tobacco and cigarettes was enacted, bringing the price of even a cheap pack of cigarettes to well over NZD 20.

However, currently no new legislation has been enacted to continue raising the tax rate on the sale of cigarettes.

It was noted by the Service that even if the government now commits to implementing annual 10 percent increases to the rate of tax, the effect will not be enough to see a smokefree New Zealand in 2025, and even a rate of 20 percent per year would narrowly miss out on the goal.

The Service stated that tax hikes are on of the most effective means of encouraging smokers to quit, and added that continued hikes to the rate of taxes on cigarettes have been shown to be an effective means of detering young people from taking up smoking at all.

Currently the government considers that New Zealand may be regarded as smokefree when less than 5 percent of the population are smokers.

Photo by danieljordahl