AMMON: Bay smokers are puffing away an estimated $90 million every year in cigarette taxes – and it’s rising. The Bay of Plenty District Health Board area’s 24,000 smokers made up around 5 per cent of the nation’s total.
This meant that of the $1.7 billion the Government received in the last financial year from tobacco taxes, Bay smokers contributed an estimated $89.8m. This is around $3700 per year for the average smoker, or $7400 per couple – just in taxes. Around 70 per cent of the cost of cigarettes is tax.
A $20 pack-a-day smoker now pays more than $7000 a year in total. Tauranga Budget Advisory Service co-ordinator Diane Bruin said smoking was a very costly exercise.
“Many people can’t afford it but they make choices, and if they choose to smoke then it affects the money they have left for groceries.”
Ms Bruin said the service’s budget advisers recommended that people cut back, because reducing consumption and saving a bit of money was better than not doing anything.
Despite the daily smoking rate falling from 17 per cent to 14 per cent in the past five years, the Government’s tobacco tax revenue increased almost half-a-billion dollars in that time. It expected this to grow to $2b by 2020/21.
The tobacco excise tax rises 10 per cent on January 1 each year. In 2015/16, tobacco tax revenue of $1.7b made up 2.4 per cent of the total Crown taxation revenue of $69.7b.
While the Ministry of Health said price increases were the most effective discouragement for smokers to continue, a leading economist said annually raising tobacco taxes was not justifiable.
