The tax on cigarettes could be introduced in New Zealand, and be paid for by taxing tobacco products.
The government’s first major tobacco plan, which aims to cut the smoking rate by 30 per cent over the next three years, will come into force next week, with a total of $20.3 billion to be spent over four years.
Tobacco-related revenue is expected to grow by $1.5 billion per year in 2020, while cigarette excise will rise by $400 million.
“We’re going to see an economic recovery, but tobacco is going to be a major part of it,” Finance Minister Steven Joyce said at a press conference.
A major theme in the plan is to reduce smoking rates by increasing incentives for people to stop smoking.
Joyce said the aim was to achieve a “tobacco tax cut of between $10 to $15 per unit”.
“The biggest cost to tobacco companies will be the increased costs of health and social services.”
The new plan is expected at a Cabinet meeting next week.
More to come.