TOURIST TAX FOR NEW ZEALAND

Posted on 12/03/2015 | About New Zealand

A new tax on travellers entering and leaving New Zealand is set to discourage thousands of would-be tourists from coming to the country, says an independent think tank.

The new charge to pay for the growing costs of border control was inefficient and would reduce services exports and dampen economic growth, said the New Zealand Institute of Economic Research (NZIER). “Right now tourism is booming, bringing in new export dollars and a chunky boost to GST (goods and services tax) revenues just when our dairy sector is taking a hit,” said NZIER principal economist Kirdan Lees. “A border charge would simply discourage much of the behaviour we want to encourage – tourists to visit and spend money in New Zealand,” he said. “Expect 34 000 fewer tourists each year because of the border charge.”

Funding the costs of border controls from general taxation would have less impact on economic growth than “punishing the tourism sector just when it is getting going”, he said. The new levy would help fund New Zealand’s biosecurity operations, aimed at protecting the country’s agriculture and horticulture, as well as the flora and fauna. The levy, which comes into effect on January 1, will be NZ$18.76 ($16.63) plus GST of 15 percent for air travellers and travellers on private craft, amounting to a total of NZ$21.57 ($19.13). The levy for cruise passengers would be NZ$22.80 ($20.22) plus GST, totalling NZ$26.22 ($23.25) to reflect the additional biosecurity assessments required at ports.

Children under two years, crew and transit passengers would be exempt, as would the military, government crisis workers and anyone who purchased and paid for their ticket in full before January 1 for travel over the next 12 months. International passenger volumes are forecast to increase from 10.1 million last year to 13.3 million by 2018-2019.