New Zealand introduces new Travel Tax starting Jan. 1, 2016
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New Zealand introduces new Travel Tax starting Jan. 1, 2016

WELLINGTON, NEW ZEALAND  — New Zealand will soon be imposing a new Travel Tax on New Zealanders and international visitors starting Jan. 1, 2016. From that date onward, air passengers will have to pay a tax of NZD$21.57 including GST (approximately Can$19), while cruise passengers will be taxed NZD$26.22 including GST (approximately Can$23).

Following the announcement of a Travel Tax in the May budget, a coalition of tourism, travel and aviation organizations was formed, led by the Tourism Industry Association New Zealand (TIA). According to TIA Chief Executive Chris Roberts, the Tax ignores a long-standing understanding in New Zealand that border services are a public good and should therefore be funded from general taxation.

“Fortunately, the tourism sector is currently performing very well, with international visitor arrivals growing by 8% in the past year,” said Roberts. “However, the new Tax will be enough to deter some people from travelling, and could shave 1-2% off the current growth. In terms of visitor spend, New Zealand is set to lose more than it gains in the tax collection.”

In light of the new Tax, the Coalition Against Travel Tax (CATT) made a number of constructive recommendations that the government has not taken up. These include suggestions to delay the Tax until Jan. 1, 2017 and to establish a traveller reference group that’s tasked with monitoring how the funds that have been collected from the Tourism Tax are allocated each year.

Roberts was particularly disappointed about the failure to agree to a Traveller Reference Group, but did say that the government has made two notable concessions, the first being that the Tax for cruise passengers has been capped at the consultation figure of $26.22. The second is that the level of the Travel Tax will be set for 30 months, with any adjustment likely to occur on July 1, 2018.