Border tax set to deter thousands travellers to 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, an independent think tank said Thursday.

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 revenues just when our dairy sector is taking a hit," NZIER principal economist Kirdan Lees said in a statement.

"A border charge would simply discourage much of the behavior 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 unique flora and fauna.

The levy, which comes into effect on Jan. 1, will be 18.76 NZ dollars (12.37 U.S. dollars) plus the goods and services tax (GST) of 15 percent for air travelers and travelers on private craft, amounting to a total of 21.57 NZ dollars (14.22 U.S. dollars).

The levy for cruise passengers would be 22.80 NZ dollars (15.04 U.S. dollars) plus GST, totalling 26.22 NZ dollars (17.15 U.S. dollars) 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 Jan. 1 for travel over the next 12 months.

International passenger volumes are forecast to increase from 10.1 million in 2014 to 13.3 million by 2018-2019. Endit