House goes into urgency to pass large tax rises on tobacco

Parliament has raised the excise tax on tobacco after going into urgency on a surprise legislative move.

Associate Health Minister Tariana Turia announced the measure just after 4.30pm on Wednesday. It was passed 118-4.

The Excise and Excise Equivalent Duties Table (Tobacco Products) Amendment Bill provides for or tobacco excise to be increased in three steps over two years.

Tax on cigarettes will rise immediately by 10% with a further 10% increase next January and a third increase of 10% in January 2012. This took the price of a packet of cigarettes to around $11 a packet from midnight.

Being hit harder is loose-leaf tobacco – an immediate 24% increase in the excise tax is to bring it into line with manufactured cigarette prices.

As with manufactured cigarettes, further rises of 10% the next two years will follow.

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