New Zealand doubles tax on airline passengers

From December 1, the ‘border processing levy’ on airline passengers will jump from NZ$20 to NZ$44.

By David Flynn, September 30 2021
New Zealand doubles tax on airline passengers

New Zealand will more than double a levy it charges travellers to enter the country by air or sea.

From December 1, the country’s Border Processing Levy will jump from NZ$20 per airline passenger return trip to NZ$43, with passengers arriving on cruise ships to be charged NZ$36.

Introduced in 2016, the levy is used to fund necessary customs and biosecurity services for all arriving and departing passengers, including Kiwis themselves.

The higher charges are expected to be passed on by airlines and cruise companies in the form of increased ticket costs.

New Zealand’s tourism industry, once the nation’s biggest export earner, has been decimated by the pandemic, with the border still largely closed to foreigners.

Adding more costs for a traveller runs the risk of putting some visitors off once borders reopen, claims the Tourism Industry Aotearoa body, and slowing an already fragile recovery in the tourism sector.

“We are strongly opposed to this option,” ITA chief executive Chris Roberts said. “It is too soon, too impactful on the traveler and will slow down the recovery for thousands of tourism businesses.”

As a justification for the increases, the government says the processing of travellers will be more complicated due to Covid-19, with additional costs and checks involved in operating ‘green lanes’ and ‘red lanes’, while the expected lower number of travellers will also mean less overall revenue.

The New Zealand government has said it wants to transform the tourism industry in the wake of the pandemic, targeting more high-value visitors amid concerns mass tourism is damaging the environment.

Additional reporting by Bloomberg

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

Tassie's probably one of most underrated destinations in Australia. Hopefully this gives them an opportunity to drive some domestic tourism. 

Qantas - Qantas Frequent Flyer

09 May 2011

Total posts 365

This is ridiculous. Nothing but a opportunistic cash grab. 

Qantas - Qantas Frequent Flyer

21 Jan 2014

Total posts 319

That’s hilarious, a leftie Govt only wanting the wealthy to visit.

04 Sep 2019

Total posts 18

Its ironic isn't it. but its also the slow taxes "creep"

but, it is NZ, beautiful place, happy to pay another $20dorra to ensure it stays beautiful by stopping people bringing their shit food from their shitty 3rd world shit hole into the country. 

if you cant afford an additional $20dorra, maybe you cant afford to be travelling to NZ

Qantas - Qantas Frequent Flyer

05 Jun 2014

Total posts 206

Yes, can't see $20 being prohibitive to anyone really... 

29 Sep 2021

Total posts 24

redwood

but it's a lot more than $20 if some low cost airline decides to reduce their frequency or pull off a route altogether, like Air Asia X did. Who do the Air New Zealands have to compete with then ? Very high cost Qantas ? Virgin ? Well they sort of cooperated for a while.

Remember Kiwi ? Air NZ set up zeal I think it was called (Freedom) to stuff up Kiwi & they succeeded.

Places like Dunedin had nonstop flights to BNE, SYD & MEL.

Kiwi disappears, so does Freedom, as no need for cheap fares, once Kiwi gone.

Dunedin goes back to BNE only & now, zero international flights.

So anyone wanting to fly to Australia from Dunedin region, must either drive/bus 3 hours to Queenstown or fly via CHC, WLG & AKL at much higher cost.

Could be $220 or more.

Look at what's happened to Queenstown fares since start of covid. They went up a lot, due to reduced capacity & no Virgin. Some people are now conditioned to pay more, even though it might be the same price as cheapest fare to USA.

29 Sep 2021

Total posts 24

They should be reducing airline taxes to zero. NZ needs tourists more than Australia.

25 Mar 2021

Total posts 12

Why should the general public pay for border services? This is users pays which for border services makes sense, also means that tourists aren't getting a free ride on the tax payer.

If $20 more makes your trip too expensive is that tourist going too be that much of a lost? It is less than a cost of a breakfast.

29 Sep 2021

Total posts 24

$250 is way more than it costs. In many cases now, it costs more to fly BNE to Queenstown, than BNE to LAX, which is insane.

Be careful. Your argument is a slippery slope.  Why should non smokers pay for the medical costs of smokers. Why should singles pay more tax than couples who chose to have kids? ............... Why should those singles have to pay taxes to fund schools?

29 Sep 2021

Total posts 24

it's all about price points. A NZD$399 one way fare to Australia either become NZD$423 or airline keeps it at NZD$399 & receives NZD$24 less.

$399 sounds a hell of lot less than $423, especially when multiplying it by family. In the brain, it sounds a lot more than $24 more. Most retailers get it. Some airlines don't.

Virgin Australia - Velocity Rewards

03 Oct 2016

Total posts 20

In conjunction with the Australian Passenger Movement Charge ($60) this makes it $60 AUD + $44 NZD just to hop across the pond. This in addition to all the other levy's and charges already. Obviously Australia is more the problem here but any addition to either one hurts travellers transiting between the countries.

29 Sep 2021

Total posts 24

banana - it's a lot more than that. Think the total for a OZ/NZ/OZ return flight for an adult is around $250 now & which airlines gets nothing.

29 Sep 2021

Total posts 24

actually was looking at BNE/Queenstown flights & total taxes AUD$266.36 (not sure if this includes the new $24 increase or not - 1 Dec was mentioned, but usually taxes apply on ticketing date, not travelling date.)

Higher taxes play into the hands of the expensive carriers like Qantas, who get more high yield fares.

2 years ago I think it was, Air Asia X, had fares of AUD$199 OOL/AKL/OOL & taxes at the time were about AUD$180, so airline was getting $19 less credit card fees of around $2 to $6. They pulled off the route & as soon as they did, fares on other carriers went up, dramatically. Don't forget competition, keeps the big boys honest.

XWu
XWu

09 May 2020

Total posts 454

 with additional costs and checks involved in operating ‘green lanes’ and ‘red lanes’, while the expected lower number of travellers will also mean less overall revenue.”


You know, this kind of reason can be used by almost all of the countries in the world, so I will be curious to now which other countries are raising taxes by 110%.

Similarly the tourist operators and accomodation in NZ/Au can also say the costs of operating tourist services had now increased (low volume, same insurance costs, same repayment of loan, shortage of casual labour willing to take low wages ie international students etc, additional PPE and presumably more washing and cleaning…… so they say) so everyone will feel entitled to do their bid to raise prices (we already seen that late last year right after the initial wave)

$20 may not be much for the increased levy but the price hikes going to stop at the border control if those listed above are valid reasons 

Delta Air Lines - SkyMiles

16 Oct 2017

Total posts 133

The tax doubles when inflation is like 2-3%  Really?  I'm not allowed to expand on that here. You decide what's fair.


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