The tax that starts in the New Year will cover the costs of border controls.

According to the New Zealand Institute of Economic Research (NZIER) it would have a negative impact on economic growth.

Funding the costs of border controls from general taxation would have less impact on economic growth than “punishing the tourism sector just when it is getting going,” said NZIER principal economist Kirdan Lees.

Government figures suggest that International passenger numbers are set to increase from 10.1 million in 2014 to 13.3 million by 2018-2019.

James Clark