The case of an Auckland businessman illegally importing 19 million cigarettes, and evading $18.7 million in tax, is the natural result of extremely high tobacco excise rates, says the New Zealand Taxpayers’ Union.
Union spokesman Louis Houlbrooke says, “Customs should be commended for their successful investigation, but they’ve only scratched the surface of New Zealand’s growing black market in tobacco.”
“According to KPMG analysis, illicit tobacco now makes up 11.5% of tobacco consumption in New Zealand – up from 9.5% in 2017. In other words, the black market is now level with one of the big three tobacco companies. If black market tobacco was consumed legally, it would raise around $287 million in excise tax annually.”
“Sadly, black market imports, along with robberies of dairies, are the natural result of absurdly high tobacco taxes. Dishonest importers are able to command a hefty profit margin on their illegal, tax-free smokes.”
“The Government’s only real hope is that smokers will respond to high taxes by switching to vaping products, which are cheaper, less harmful, and come with appealing flavours. So why has Parliament’s Health Select Committee proposed a ban on the sale of flavoured vape products at general retailers? This will only serve to keep smokers on the path to black market cigarettes, driving even higher rates of crime and tax evasion.”