MP has no evidence to back tobacco tax 'rort'

New Zealand First MP Andrew Williams has no evidence to support his claims the tobacco industry is rorting taxpayers out of tens of millions of dollars.

In a public statement today, the list MP says he wants customs minister Maurice Williamson to look into a loophole he says could be costing between $30 million and $40 million in avoided taxes.

He alleges “vast” quantities of cigarettes were imported and stockpiled in warehouses towards the end of last year, before the January 1 tax increase of 10%.

He says those cigarettes were then re-exported overseas after January 1 and the tobacco industry claimed back the increased excise tax.

“They were even chartering planes at huge expense to fly cigarettes into the country and stockpile them in warehouses to meet the 31 December deadline. That's how lucrative this scheme is.” 

However, when asked by NBR ONLINE to provide evidence, Mr Williams could not and his claims were rubbished by an industry source.

“I don’t know how much was imported.

“I have no idea who was doing it, but it’s people involved obviously in the tobacco industry in the know.

“I’ve got no figures or documents, only information from people who’ve witnessed it and seen it and said there’s definitely something going on here,” he told NBR ONLINE.

Mr Williams was not even sure where the tobacco was being held, only that it was in “various forms of warehouses.”

He is urging the government to act on his "claims."

Mr Williamson's press secretary Clint Owens says occasionally tobacco companies will import cigarettes and pay the excise duty, only to have to export the products when they expire.

He says in those cases, the tobacco companies are entitled to be paid their excise tax as they paid it when the tobacco was imported.

Others told NBR ONLINE New Zealand Customs went to great lengths to make sure the excise tax paid on export was exactly the same as what was paid on import – no higher and no lower.

One of the country’s biggest tobacco companies, British American Tobacco produces its cigarettes in Australia and is frequently importing large container loads into the country - all of which is legitimate.

bcunningham@nbr.co.nz