Illicit Consumption increased by 43.6% in 2017, underpinned by rising Inflows of Non-Domestic Illicit cigarettes.
Illicit Trade Volume (Bn)
Illicit trade Incidence (%)
Total Tax Loss (NZD Mn)
Composition of Cigarette Consumption
Legal Domestic Consumption (LDC)
Estimated Excise Tax Loss
NZD MnUSD Mn
Lost excise revenue
Lost VAT revenue
Illicit Consumption has more than doubled in the three years since the Asia Illicit Tobacco Indicator first included the New Zealand market, to 349 million cigarettes (or cigarette equivalents) in 2017, from 137 million in 2015.
The level of Illicit Incidence has risen by 7.5 percentage points to 12.7% over the same period. The rise in Illicit Consumption more than offset the 2.7% decline in Legal Domestic Consumption in 2017.
Our estimates indicate that the Tax Loss due to Illicit Consumption of cigarettes and RYO rose by 59.7% to NZD 319 million in the fiscal year 2017/18. This was driven by a combination of increasing Illicit Consumption and higher Excise Tax rates.