New Zealand announces tourist tax to fund straining infrastructure

FILE PHOTO: Milford Sound airport in New Zealand March 7, 2017. REUTERS/Henning Gloystein

WELLINGTON (Reuters) - New Zealand’s Labour-led government said on Friday it plans to impose a tax on most international visitors to fund infrastructure and ease strains on the South Pacific nation’s booming tourist sector.

The new tax of up to NZ$35 ($24.40) per person will start in mid-2019 - the middle of the official “China New Zealand Year of Tourism” - and is expected to provide an extra NZ$57 million to NZ$80 million ($39.7 million-$55.8 million) a year to fund conservation and infrastructure.

“It’s only fair that they make a small contribution so that we can help provide the infrastructure they need and better protect the natural places they enjoy,” Minister for Tourism Kelvin Davis said in an emailed statement.

Neighboring Australia, New Zealand’s top source of visitors, would be exempt from the tax but most other major sources of tourism would be covered, including China, the United States and the United Kingdom.

The tax would be collected with visa applications and through a new electronic travel authority that people eligible for visas on arrival would have to apply to and pay the fee.

A record surge in tourism in the past four years has fueled New Zealand’s impressive economic growth but left its infrastructure straining, with locals complaining of once-tranquil nature walks crowded with people and rubbish.

The small nation with a population of around 4.5 million saw visitor numbers leap almost 30 percent since 2015 to 3.8 million in the year to April, according to data from the Ministry of Business, Innovation and Employment.

Prime Minister Jacinda Ardern’s centre-left government took the helm in October, ending almost a decade of centre-right National party rule. Her Labour Party had campaigned to make the economy “work for all New Zealanders” and had struck a more protectionist tone that included a looming ban on most foreigners buying homes.

Reporting by Charlotte Greenfield; Editing by Paul Tait