Extra duty goes on tobacco and cigarettes from 1 January as part of a campaign to reduce smoking.
Tariana Turia. Photo: RNZ
There is a 10% rise in the excise on tobacco products which follows a 50% rise in the duty since April 2010. There will be two more 10% rises in the next two years.
Associate Health Minister Tariana Turia says the intention is that the price of a packet of cigarettes will cost more than $20 by 2016.
According to figures from the 2013 Census, there has been a 23% drop in the number of adult smokers since the 2006 Census, and there are 22,000 fewer Maori smokers in that period.
Mrs Turia says it is well known that pricing is a big incentive to give up.
Quitline chief executive Paula Snowden says the latest Census data has has explained a mystery over why the number of people calling the line had dropped in the past year.
Ms Snowden says Quitline had noticed a 10% drop from part-way through 2012 and which continued in 2013, but couldn't explain why.
"We were thinking is our marketing right? Are the campaigns right? ... We couldn't put it down to anything, and now I think we can put it down to the fact that there are less smokers - and that's exactly the right trend for New Zealand."
Ms Snowden says the Census shows there are now 135,000 fewer smokers and means just over 15% of the adult population smoke.
That number is expected to drop further due to the tax on tobacco products, and Ms Snowden says Quitline is preparing to deal with a flood of people wanting to give up smoking.