Options to Reduce New Zealand’s Duty-free Tobacco Concessions

This regulatory impact statement (RIS) has been prepared by the Ministry of Health in consultation with the New Zealand Customs Service, The Treasury, Ministry of Business, Employment and Innovation, and the Ministry of Foreign Affairs and Trade.

This paper provides an analysis of options for reducing or removing duty-free tobacco concessions or allowances. The current concessions are:

• the international traveller’s ‘duty-free’ allowance
• the ‘gift’ allowance
• the ‘home-grown’ allowance.

The analysis in this RIS was constrained by two factors:

• the urgent nature of the analysis – it was undertaken in April 2014 to meet Budget 2014 timeframes at short notice; and
• a lack of detailed information on both the size of the incoming traveller’s duty-free market and the quantity of home grown tobacco currently being produced in New Zealand.

(This RIS was not prepared and tabled with the original Cabinet paper. As such the purpose of this RIS is not to inform Cabinet decision making, but to inform public debate.)