New Zealand significantly hikes tax on foreign tourists

On September 3, the New Zealand government announced that starting from October 1, the tourist tax levied on foreign tourists will be significantly increased from the current NZ$35 (about US$22) to NZ$100 (about US$63).

New Zealand's Ministry of Tourism said that increasing taxes and fees will help ensure that tourists have a high-quality tourism experience. Tourism ministry data shows that although foreign tourists bring a large amount of income to New Zealand, they also bring many pressures and challenges to infrastructure, local communities and the natural environment. The New Zealand government began to levy taxes on foreign tourists arriving in New Zealand for tourism in July 2019. However, according to Reuters, this income is now insufficient to offset the maintenance costs generated by the massive influx of tourists.

This measure of significantly increasing the tourist tax has raised concerns among tourism industry practitioners. Rebecca Ingram, head of the Tourism Industry Association New Zealand, pointed out that New Zealand's tourism industry has not fully recovered from the impact of the COVID-19 pandemic. At this time, increasing the tax on foreign tourists will further reduce New Zealand's competitiveness in the international tourism market.

However, New Zealand Tourism Minister Matt Doocey said that the new tourist tax is still competitive compared with countries such as Australia and the United Kingdom. He believes that New Zealand will continue to be regarded as one of the attractive tourist destinations.

The New Zealand government hopes that by increasing the tourist tax, on the one hand, it can ease the pressure on infrastructure and other aspects, and on the other hand, it can also raise more funds for tourism-related construction and maintenance. But what impact this decision will have on the future development of New Zealand's tourism industry remains to be further observed. The reaction of international tourists to this policy and the subsequent changes in New Zealand's tourism market will also be closely watched by all sectors.