Associate Health Minister, Sam Lotu-Iiga, says raising the price of tobacco is the single most powerful tool to reduce smoking.

"The more they smoke, the more they pay. The more they pay, the greater the incentive to quit," he said.

The latest announcement is the second such round of tobacco tax increases.

In 2012 the Maori Party led the first round of 10 percent tax increases rolled out annually over the past four years.

The initiative is a core Maori Party policy to reduce high smoking rates among Maori and Pacific peoples.

Around 550,000 people smoke daily in New Zealand -- that's 15 percent of the adult population.

New Zealand has a nationwide goal to become a smoke-free nation by 2025.

Tax revenue from the increases will be around $425 million over the next four years.

"While we've helped many to stop smoking, there is still a way to go and that's what today's measures are about," Maori Party co-leader Marama Fox said.

Mr Lotu-Iiga will introduce a Bill immediately after the Budget to implement the changes.

Newshub.