NEW DELHI: The governments of
New Zealand
and
Malaysia
have decided to reverse their respective bans on smoking citing concerns about potential impacts on government
tax revenues
.
New Zealand's new government has committed to introducing legislation in its initial 100 days to overhaul the Reserve Bank of New Zealand's mandate and lift a ban on the sale of cigarettes.
In a similar move, the Malaysian government has also decided to retract a similar proposed generational
smoking ban
and instead, has presented a revised version of the bill, diluting its initial stringency.
Amidst protests from advocates of the bills in both nations, the respective governments have justified their decisions to overturn the bans, citing concerns about potential impacts on government tax revenues.
The prioritisation of government tax stability emerged as a primary factor influencing the reversal of these bans.
In New Zealand, the initiative has been led by Prime Minister Christopher Luxon.
The centre-right National Party, helmed by the Prime Minister, reclaimed authority in a coalition with the populist New Zealand First party and libertarian ACT New Zealand.
Together, they have embarked on an action plan concentrating on economic revitalization, alleviating the cost of living and reinstating law and order as focal points of their governance agenda.
The decision to reverse the cigarette ban is anticipated to aid the New Zealand government in financing tax cuts, a pivotal campaign promise.
The government also aims to prevent the emergence of a black market for tobacco by repealing the law. Instead, they seek to leverage legal cigarette sales to compensate for the proposed tax cuts.
The ban had a substantial financial impact on the Government's budget, estimated at approximately $1 billion, prompting its reversal to mitigate the fiscal implication.
Likewise, the Malaysian government revoked its Generation Endgame law due to concerns over substantial reductions in tax collections.
Additionally, constitutional concerns arose regarding the ban, highlighting potential disparities in treatment before the law.
Recent government data revealed that Malaysia garnered approximately 3.47 billion ringgit ($743 million) in taxes from cigarette and tobacco product sales in 2021.
These financial considerations and constitutional challenges prompted the government to rescind the ban, given its potential impacts on revenue and legal equality.
In December 2022, New Zealand implemented one of the world's most stringent cigarette bans.
The comprehensive law aimed to prohibit tobacco sales to younger generations, restrict nicotine levels in cigarettes and significantly reduce the number of stores permitted to sell tobacco products.
Enacted under former Prime Minister Jacinda Ardern's administration, the legislation sought to prevent individuals born after 2008 from purchasing these products within the country.
The law also proposed a gradual increase in the minimum age for purchasing tobacco and intended to drastically reduce the number of retailers authorized to sell tobacco products.
Under the new law, the maximum number of retailers allowed to sell tobacco would have been reduced to merely 600 nationwide, a substantial reduction from the current count of 6,000 retailers.
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