New Zealand aims to be smoke-free by 2025, raises tobacco taxes

New Zealand is aiming to be smoke-free by 2025, as the country's government announced a 40 percent hike in tobacco taxes over the next four years on Thursday, the Associated Press reported. 

The tax increases will begin January 1, 2013, and will bring up the cost of Pall Malls, New Zealand’s best-selling cigarette brand, to at least $17.20 (around $22 New Zealand dollars) for a pack of 20 in 2016, Bloomberg Businessweek reported. Cigarette prices in the country are already some of the world's highest, currently at an average price of $14.20. 

Officials are hoping that the new policies will cause New Zealanders to quit smoking altogether, and are so serious about the goal that they considered pricing a pack of cigarettes at $75, according to the AP, though the idea was later dismissed.  

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“Previous increases in the excise have reduced tobacco consumption as smokers have given up or cut back and fewer young people begin smoking,” Finance Minister Bill English told parliament in his budget speech yesterday, Bloomberg reported.

New Zealand's government has predicted that taxes on domestic and imported tobacco products will generate 17 percent more revenue for the country in 2016, according to Bloomberg.

As the Associated Press points out, though other countries have praised the goal of cutting tobacco out of their population's lives entirely, few, if any, have actually set a firm date to reach the goal. 

However, some in the tobacco industry worry that the country's new smoke-free policy is unsustainable and may encourage illegal activities. 

“We see it as vitally important that governments establish workable tax regimes and economic policies that do not create conditions that encourage illicit trade,” British American Tobacco said on its website. 

The organization's New Zealand unit, which controls over 70 percent of the country’s tobacco market, blames “ever higher tobacco taxes” for driving the black market for cigarettes, according to Bloomberg. 

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New Zealand already charges more than 70 percent tax on cigarettes, compared to 41 percent on average for China, 45 percent on average for the US, 64 percent for Australia and 80 percent for France, according to the AP. 

Smoking rates amongst New Zealanders over the age of 15 have fallen from about 30 percent in 1986 to about 20 percent today, the Daily Mail reported.