Be­ware — on­line shop­ping taxes ramp up bill

Herald on Sunday - - WE SALUTE YOU - By Brit­tany Keogh

Nab­bing a bar­gain is part of the at­trac­tion of on­line shop­ping but some Ki­wis are be­ing stung with hefty tax bills for over­seas pur­chases. The to­tal charges to­tals tens of mil­lions.

In 2016 New Zealan­ders paid more than $31 mil­lion in GST and duty on 248,466 per­sonal im­ports — the vast ma­jor­ity on­line shop­ping pur­chases — a slight in­crease on 2015’s nearly $30m from 267,473 im­ports.

Mean­while, tax charges were writ­ten off on more than 7 mil­lion other parcels com­ing into the coun­try last year be­cause the amount ow­ing on them was below the min­i­mum that could be col­lected.

The Cus­toms Ser­vice screens in­com­ing parcels to make sure the right amount of tax is paid on im­ported goods. Charges less than $60 in GST and duty are waived but bills of $60-plus must be paid be­fore Cus­toms will re­lease them.

The amount owed is cal­cu­lated at 15 per cent GST on the goods, plus duty, freight, in­sur­ance and levies payable, and a $49.24 en­try trans­ac­tion fee if the to­tal is more than $60.

This means the price ad­ver­tised on an over­seas web­site doesn’t al­ways rep­re­sent the true cost Ki­wis have to pay.

If the per­son bring­ing in the goods owes $60 or more in tax, New Zealand Post or their cho­sen courier com­pany con­tact them and they have 20 days to pay. Fail­ure to pay the bill usu­ally means the pack­age will be re­turned to the sender.

How­ever, be­cause the im­porter is only no­ti­fied of the charges once the goods ar­rive in the coun­try and not at time of pur­chase, they some­times come as a sur­prise.

Reg­u­lar on­line shop­per Lucy Hay­ward of Auck­land was un­aware of the duty and GST charges when she bought cloth­ing from an Aus­tralian web­site.

She told the Her­ald on Sun­day she or­dered sev­eral items worth about $400 in to­tal that ended up cost­ing closer to $600 af­ter fac­tor­ing in the $200 in GST and duty charges she paid.

Hay­ward said she only re­alised she would have to pay the fees on her new clothes when she got a call from a courier com­pany telling her she owed them money.

“I was re­ally sur­prised and very un­happy about it.”

A univer­sity stu­dent at the time, Hay­ward didn’t have a lot of dis­pos­able in­come and had to use money she’d been given as Christ­mas gifts and sav­ings from part-time work to pay the bill.

Although the ex­pe­ri­ence hadn’t put her off buy­ing on­line, she was more care­ful about her pur­chases now and said other peo­ple should make sure they un­der­stood the rules around duty and GST charges be­fore click­ing “buy”.

E-con­sumers can plan ahead and use the What’s My Duty tool on the Cus­toms’ web­site to cal­cu­late how much duty and GST they’ll have to pay for on­line shop­ping be­fore mak­ing pur­chases.

Other costs that can crop up when shop­ping us­ing in­ter­na­tional web­sites that Ki­wis should watch out for in­clude cur­rency con­ver­sion and ship­ping charges.

123RF

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