NZ slashes duty-free tobacco limit by 75%

New Zealand will reduce the duty-free allowance for cigarettes from the current 200 cigarettes to just 50.

In an attempt to make New Zealand smoke-free by 2025, the government will lower the duty-free allowance for international travellers visiting New Zealand, from the current 200 cigarettes to 50 cigarettes.

This brings New Zealand in line with similar regulations in Australia. The new duty-free tobacco limit is forecast to raise $50 million in extra revenue annually. These changes will help to eliminate cheaper avenues for smoking, which are out of step with recent government initiatives

The new limit of 50 cigarettes will apply from 1 November 2014. If the New Zealand Associate Minister of Health Tariana Turia had her way, she would have removed the duty-free allowance completely.

Smoking causes up to 5,000 premature deaths in New Zealand every year.

“It is an anomaly that on the one hand we’re increasing the price, and on the other hand we’re offering a duty-free allowance on 200 cigarettes to every adult arriving at our borders,” says Associate Minister of Health Tariana Turia.

The price differential between retail tobacco and duty-free tobacco will continue to grow with two further 10 per cent increases in the rate of excise scheduled over the next two years, says the minister.

“I considered recommending that the duty-free allowance be removed entirely, and although that would be consistent with the Government’s goal of making New Zealand effectively smoke-free from 2025, it would not be practical.

“Completely removing the duty-free concessions would mean that smokers, who might have a packet or two of cigarettes on them when going through Customs, had to either dump them or declare them and pay duty. If they did neither, they would risk prosecution and seizure of the goods.

“Either way, it would have potentially created considerable compliance costs for Customs in processing passengers at busy airports. Consequently, the Cabinet has agreed to reduce, rather than remove, the allowance.”

“It makes sense for us to match Australia’s duty-free limits for tobacco, given that nearly half of all our inbound passengers come from, or via, Australia.”

Along with the reduction in the duty-free concession, tobacco will be removed from the gift concession that currently allows gifts sent from overseas to be free of duty and GST in New Zealand, providing they exceed no more than $110 in total value.

Budget 2014 will include additional funding for New Zealand Customs Service of $2.7 million in 2014/15, and $420,000 in the following years to assist with implementation of the new rules.

New Zealand duty-free limits for tobacco

• New limits effective from 1 November 2014
• The duty-free tobacco allowance for passengers arriving in New Zealand will fall to 50 cigarettes, or 50 grams of cigars or tobacco products – similar to Australia. Currently passengers arriving in New Zealand can bring up to 200 cigarettes, 250 grams of tobacco, 50 cigars (or a mixture of all three weighing up to 250 grams) into New Zealand free of duty and GST.
• Tobacco products sent to New Zealand as a gift from abroad will no longer be eligible for the $110 duty-free gift allowance. This means all gifts of tobacco products sent to New Zealand will now be subject to excise duty and GST.
• What if you are carrying more than the allowance? As under the current rules, passengers carrying more than the new limit will need to declare this, and pay the relevant duty and tax on the excess amounts, or forfeit these excess amounts at the Customs controlled area. If passengers fail to declare dutiable goods, the goods will be confiscated and passengers may be prosecuted.
• The changes to the traveller’s duty-free tobacco allowance will not affect outgoing international travel. Outgoing passengers will still be able to purchase duty-free tobacco from New Zealand duty-free stores in accordance with the overall limits specified by their destination country.