The New Zealand Government is losing up to $89.1 million per annum in tax revenue due to tobacco brought in to the country from overseas, ASPIRE 2025 researchers estimate.
In this letter published in the NZ Medical Journal, Professor Richard Edwards says duty-free and smuggled tobacco are a public health problem because they lower the average price of tobacco. This undermines the impact of high tobacco product taxes in promoting smoking cessation and reducing smoking initiation.
Edwards and a team of ASPIRE2025 researchers carried out discarded pack collection studies in 2008 and 2009, and again in 2012 and this year to assess the proportion of discarded packs that were foreign and estimated to have missed Government tax revenue. From this, they conservatively estimate that the New Zealand Government loses between $59.9 and $89.1 million in tax revenue due to tobacco brought into New Zealand from overseas. Much of this is likely to have been bought duty-free in non-New Zealand airports. Additional revenue will be lost from the purchase of duty-free cigarettes by arriving passengers at New Zealand airports (not measured in this study), so this figure is likely a significant underestimate of lost revenue.
The researchers argued that New Zealand should follow the example of Singapore, which has recently abolished duty-free allowances, or Australia, where the allowance has been greatly reduced.
Further Information
For more information or to request a copy of this letter please contact:
Professor Richard Edwards
University of Otago, Wellington
email: richard.edwards@otago.ac.nz