Last December, Treasury collected $423 million, while during the next seven months the combined take was $390m. The figures include both imported tobacco and excise from Imperial Tobacco's factory in Petone.
In December 2011 the amount of tax collected on tobacco, at $370m, was more than the following six months combined. Customs Minister Maurice Williamson was not concerned by the tactics. "As long as tobacco companies are abiding by the law then it's up to them how they behave," he said. Smokers interviewed on the subject were baffled to learn that increases in January did not necessarily go to the Government.
For Imperial Tobacco, which runs New Zealand's only cigarette factory, excise is triggered when product crosses a "bond line" in its warehouse, timed at the company's discretion. Brendan Walker, Imperial Tobacco's New Zealand manager, said the company's aim was to ensure it had product when customers wanted it, but he did not dispute there was a windfall opportunity each year.
"We, like any other business, will look at maximising any efficiency we can," he said. A spokeswoman for British American Tobacco, which has close to 75 per cent of the New Zealand market, all with imported products, said the company was focused on paying taxes which were due "in as efficient a way as possible".
US tobacco giant Philip Morris, the manufacturer of Marlboro Red cigarettes, has not replied to written questions. A tobacco industry source said some smokers did buy up large in December, as did retailers, with reports of dairy owners borrowing money from family members to maximise the potential windfall.
But the source conceded the companies used a similar tactic. "Everyone in the chain is speculating," the source said.
Wellington taxi driver William Dunn, who after about 40 years of smoking is struggling to kick his 10-cigarette-a-day habit, said he assumed that when the cost of a pack of cigarettes went up each January, the increase immediately flowed to the Government.
"I'll bet 98 per cent of people think that money is going to the government," Dunn said."You would have thought the tobacco companies are making enough money without having to do that."
In December 2011 the amount of tax collected on tobacco, at $370m, was more than the following six months combined. Customs Minister Maurice Williamson was not concerned by the tactics. "As long as tobacco companies are abiding by the law then it's up to them how they behave," he said. Smokers interviewed on the subject were baffled to learn that increases in January did not necessarily go to the Government.
For Imperial Tobacco, which runs New Zealand's only cigarette factory, excise is triggered when product crosses a "bond line" in its warehouse, timed at the company's discretion. Brendan Walker, Imperial Tobacco's New Zealand manager, said the company's aim was to ensure it had product when customers wanted it, but he did not dispute there was a windfall opportunity each year.
"We, like any other business, will look at maximising any efficiency we can," he said. A spokeswoman for British American Tobacco, which has close to 75 per cent of the New Zealand market, all with imported products, said the company was focused on paying taxes which were due "in as efficient a way as possible".
US tobacco giant Philip Morris, the manufacturer of Marlboro Red cigarettes, has not replied to written questions. A tobacco industry source said some smokers did buy up large in December, as did retailers, with reports of dairy owners borrowing money from family members to maximise the potential windfall.
But the source conceded the companies used a similar tactic. "Everyone in the chain is speculating," the source said.
Wellington taxi driver William Dunn, who after about 40 years of smoking is struggling to kick his 10-cigarette-a-day habit, said he assumed that when the cost of a pack of cigarettes went up each January, the increase immediately flowed to the Government.
"I'll bet 98 per cent of people think that money is going to the government," Dunn said."You would have thought the tobacco companies are making enough money without having to do that."
Are you paying over $5 / pack of cigs? I buy my cigarettes at Duty Free Depot and I'm saving over 70%.
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