Wellington, June 28, 2020
Tweaks to tobacco laws will see stricter rules at the border from next week and it is hoped that will help snuff out cigarette smuggling and tobacco tax evasion.
From Wednesday, July 1, 2020, tobacco products, leaf and refuse will become prohibited imports, meaning that people on the receiving end must obtain a permit.
The permit is free but must be obtained first, failing which the products will be seized and destroyed by New Zealand Customs.
The permits are available from New Zealand Customs.
Customs hopes that the change will allow officials to act “quicker and more efficiently” on parcels containing cigarettes, because it will be able to see which are not going to legitimate retailers.
Licence and tax checks
Northern Ports manager Mark O’Toole said it will also allow Customs to check manufacturers are licensed, and paying excise tax on tobacco leaf, after the government missed out on an estimated $10.8 million in the past year.
“To manufacture tobacco, companies actually need a licence that needs to be issued by Customs. But a number of importers would say that the product was for pesticides, things like that, to think that we would move on. People have seen an opportunity, a loophole in the law if you would like. The government has become aware of that and closed that loophole,” he said.
However, travellers bringing tobacco across the border in their luggage would not need a permit, nor would people importing cigars, cigarillos, water-pipe tobacco, chewing tobacco, snuff and snus.
Receiving tobacco leaf and refuse through international mail would be banned, for anyone without a manufacturing licence.
Parliament approves Amendment
The change comes after the government debated the Customs and Excise (Tobacco) Amendment Bill with urgency in May 2020. Parliament approved the Amendment Bill.
Customs Minister Jenny Salesa said that there had been a rising tide of illicit tobacco through international mail and freight in recent years, “often with organised crime involved.”
Director of Action for Smokefree 2025 Deborah Hart agreed, saying that the cost of cigarettes was proven to be a major factor in determining whether someone smokes or not.
That meant a permit system to stymie the sale of low-cost black market cigarettes would likely result in less smokers, she said.
But Hart said if there was now more excise tax being paid, it should go towards getting the whole country smoke-free.
Eliminating black market
“The best way to thwart the black market is to get New Zealand to Smokefree 2025. About 500,000 people in this country are still smoking. What we need to do is find ways to help them stop smoking.
The tax money should be used to help people quit smoking, to less harmful alternatives such as vaping and snuff, and to go cold turkey if people can do that,” she said.
ACT Party disagrees
However, ACT Leader David Seymour maintained that the new permit system was “bureaucratic activity,” which failed to acknowledge why the tobacco black market existed – the cost of cigarettes.
He had voted against the law change and said that people operating in the black market were not following the rules by definition, so any effect of the new permit system would be marginal.
“What we have here is a failure to admit the tobacco tax policy has failed. The government is addicted to the revenue. Now, instead of admitting that it is wrong and reducing tobacco taxes, it is scaling up enforcement activities to try and protect that revenue base,” he said.
Katie Todd is a Reporter at Radio New Zealand. The above Report and Picture have been published under a Special Arrangement with www.rnz.co.nz