The projected legal price per stick and annual revenue from tobacco excise tax in 2025, with a 10% annual increase in excise, under a range of modelling assumptions
| Scenario | Legal price per stick in 2025 (2011NZ$) | Annual tax revenue in 2025 (2011NZ$billion) |
|---|---|---|
| Annual 10% increase in excise (base-case*) | $1.80 ($1.70 to $1.90) | $3.5 ($2.3 to $5.0) |
| Elasticity: −0.2 at all ages (prevalence) | $1.80 ($1.70 to $1.90) | $3.3 ($2.2 to $4.7) |
| Elasticity: 50% higher for Māori | $1.80 ($1.70 to $1.90) | $3.6 ($2.3 to $5.2) |
| Elasticity: prevalence proportion 25% | $1.80 ($1.70 to $1.90) | $3.4 ($2.1 to $4.8) |
| Illicit market: stable at 1% | $1.80 ($1.70 to $1.90) | $3.5 ($2.2 to $5.0) |
| Illicit market: +5% per year to 50% | $2.00 ($1.90 to $2.10) | $3.7 ($2.4 to $5.2) |
| Illicit market: +20% per year to 50% | $1.40 ($1.30 to $1.50) | $3.6 ($2.3 to $5.2) |
| Tax pass-through: 80% | $1.40 ($1.30 to $1.50) | $3.5 ($2.2 to $5.0) |
| Tax pass-through: 120% | $1.70 ($1.60 to $1.70) | $3.5 ($2.2 to $4.9) |
| Illicit price: 25% of legal price | $2.10 ($2.00 to $2.20) | $3.6 ($2.2 to $5.2) |
| Illicit price: 65% of legal price | $1.80 ($1.70 to $1.90) | $3.5 ($2.2 to $5.0) |
| Best-case† | $1.90 ($1.80 to $2.00) | $3.4 ($2.2 to $4.9) |
| Worst-case‡ | $2.20 ($2.10 to $2.30) | $3.7 ($2.4 to $5.3) |
Mean and 95% uncertainty intervals presented.
*Base-case scenario has illicit price set at the legal price minus two-thirds of the tax, 100% tax pass-through and illicit market share increasing by 1% per year to a maximum of 50% of the market.
†Best-case scenario (from a public health perspective) has illicit price set at 65% of the legal price, 120% tax pass-through and illicit market share stable at baseline estimate of 1%.
‡Worst-case scenario has illicit price set at 25% of the legal price, 80% tax pass-through and illicit market share increasing rapidly (20% per year to a maximum of 50% of the market).