The Government is proposing increasing the levy rate for landfills by up to $50 in three years.
Associate Environment Minister Eugenie Sage announced a raft of proposals on Wednesday to tackle "New Zealand's mounting waste challenges".
Sage said in the past decade, nearly 30 million tonnes of waste has been sent to municipal landfills nationwide, with much of the waste recyclable or able to be composted or reused.
"We can't allow this situation to continue," Sage said.
"One of our first moves as a Government was to ban single-use plastic shopping bags. "Reducing waste is part of our drive to reduce the volume of rubbish ending up at the tip and contributing 5 percent of our annual greenhouse gas emissions."
One proposal is to "encourage more reuse and recycling" by progressively increasing the levy rate for landfills that take household waste. Currently, that is $10 per tonne - set in 2009 - and the Government has suggested raising that to $50 or $60 per tonne by mid-2023.
The Ministry for the Environment believes this would only have a minimal impact on a family's weekly budget. If the new levy rate was introduced, the price of a kerbside rubbish bag would likely increase by 33 cents.
The Government has also proposed extending the levy to cover more landfill types, including industrial, construction and demolition fills - but not "cleanfills or farm dumps". The newly levied landfills would be charged at a rate of $10 or $20 per tonne depending on their type.
The Government wants to invest the additional revenue into more waste reduction solutions, such as building New Zealand-based recycling and reprocessing infrastructure. Sage said this will also help create jobs.
"All of the revenue from the landfill levy gets recycled back into waste minimisation with half going to local councils so they can fund the resource recovery and other infrastructure their communities want," Sage said.
"The other half goes to the Waste Minimisation Fund which provides grants to support businesses and community organisations reduce waste."
The fund has contributed $312 million to 219 waste minimisation projects since the levy was established in 2009.
Currently, less than 30 percent of construction and demolition materials are recycled or reused.
The Government has already announced a new multi-agency project to identify the environmental risks associated with landfills after the Fox River landfill crisis in March.
The proposals are found in a new consultation document - Reducing Waste: A more effective landfill levy - which the public can submit on until February 3.