Duty free benefits from tax rise

21 May 2010

A rise in GST from 12.5 per cent to 15 per cent means travellers shopping at Auckland Airport duty free stores will enjoy even cheaper prices compared to the local market. However, the actual impact remains to be seen, duty free representatives say.

DFS managing director Craig McKenna says any increase in savings proposition for the travelling consumer is obviously a benefit. “This is a value-driven market and therefore the GST increase will further improve the savings available,” McKenna says. “However there are several other factors which also impact the buying behavior of the customer. Time will tell as to the impact of this.”

JR Duty Free chairman Garry Stock agrees that the change in GST is likely to influence people to buy duty free and the quantity they buy. “The alert New Zealand traveller should realise there is an incremental benefit to shopping at duty free at Auckland Airport but how material that benefit will be, in terms of increased sales, is difficult to gauge,” he says.